The income tax consequences of abandonment in bankruptcy have posed significant problems for farm and ranch taxpayers for well more than a decade. With two Circuit Courts of Appeal embracing the “deflection” theory, the Eighth and Ninth Circuit Courts of Appeal decisions assured that a taxpayer filing bankruptcy is highly vulnerable to income tax liability on the property abandoned by the bankruptcy estate.
Harl, Neil E.
"Income Tax Consequences of Abandonment,"
Agricultural Law Digest: Vol. 13
, Article 1.
Available at: http://lib.dr.iastate.edu/aglawdigest/vol13/iss6/1