The Revenue Reconciliation Act of 1993 made major changes in the handling of discharge of indebtedness income. The legislation repealed (effective in 1995) the stock-for-debt provision allowing insolvent debtors to issue stock in satisfaction of debt without creating discharge of indebtedness income, created a provision for discharge of real property business debt and added additional tax attributes to the list of those reduced from discharge of indebtedness. The latter provision applies to debtors in bankruptcy, those insolvent but not in bankruptcy and solvent farm debtors.6 The legislation continues the pattern established in 1986 of a different system of ordering the reduction of tax attributes and the reduction of basis of property for solvent farm debtors.
Harl, Neil E.
"New Rules for Solvent Farm Debtors,"
Agricultural Law Digest: Vol. 4
, Article 1.
Available at: http://lib.dr.iastate.edu/aglawdigest/vol4/iss23/1