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Abstract

In 1986, Congress enacted legislation allowing solvent farm debtors to avoid income from the discharge of indebtedness. The statute was amended substantially in 1988 to allow solvent farm debtors to exclude discharge of indebtedness amounts from income only to the extent tax attributes were reduced or the income tax basis of eligible property was reduced. In 1994, the first case to interpret the statute was decided by the Tax Court.

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