Article Title

Payment on Guarantees


With the onset of financial and economic trauma in agriculture in the mid 1980s, the matter of loan guarantees assumed greater importance than at any time since the 1930s. In a typical situation, a parent has guaranteed a machinery or livestock loan; if the child is unable to pay as the primary obligor, the parent may be elevated to a position of primary liability. The question then becomes whether the parent as guarantor has a bad debt deduction if the parent makes good on the loan. If the parent does not pay, and instead manages to negotiate a discharge of indebtedness, the question becomes whether the parent as guarantor has discharge of indebtedness income.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.