This rule says the imputed principal amount of the new debt instrument issued in consideration for the old debt instrument is limited to the fair market value (FMV) of property pledged to secure nonrecourse debt
(as opposed to the stated principal amount of the debt instrument).
Any discharge or forgiveness of the nonrecourse debt
, however, does not result in taxable cancellation of debt income (CODI); that is because the lender cannot legally pursue any other assets of the borrower.
As discussed below, on her 1938 federal income tax return, Beulah reported the transaction as the sale of a nondepreciable equity interest in the Brooklyn Apartment Building with a zero basis, rather than the physical property itself in exchange for $2,500 (not treating the nonrecourse debt
relief as an economic benefit).
4% to $60 million as interest expense on nonrecourse debt
collateralized by credit card receivables plunged 61.
For nonrecourse debt
the selling price is the total of the mortgage principal and past-due interest and penalties.
He would not rule out another round of nonrecourse debt
such as the pounds 485 million raised to upgrade and reduce sulphur dioxide emissions at Rugeley earlier this year.
Tata Coffee, India's largest coffee plantation company, said the acquisition would be financed by a combination of equity and nonrecourse debt
Before reviewing the rules for nonrecourse debt
, it is helpful to view the relevant history of the court cases that led to the development of the rules.
300 (1983), in which nonrecourse debt
permits a taxpayer to have a basis in excess of his economic investment.
Thus there can be no discharge of indebtedness income because the amount realized on the deemed sale equals the full amount of nonrecourse debt
Discharge of nonrecourse debt
, however, is treated as an amount realized from a sale of a property instead of COD income.
Converting nonrecourse debt
to recourse debt can create COD income applicable for IRC Sec.