News & Articles

Debt or Equity? New Guidance Helps You Decide

Posted on Wed, Dec 14, 2016

Corporations can generally deduct interest on debts for federal tax purposes. A valid obligation exists if the parties intended to create a debt, and the debt is enforceable and unconditional. In contrast, a capital contribution is a direct or indirect contribution of cash or other property to the capital of a business entity. Generally, a contribution to the capital of a corporation isn't treated as taxable income to the corporation, and the contributor can't deduct the payment for tax purposes.

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Tags: IRS, Cancellation of Debt, Interest

To Forgive Is Not Always Divine

Posted on Fri, Aug 19, 2016
F or tax purposes don't think that you're off the hook if another party forgives or cancels a debt. Under the "cancellation of debt" (COD) provision in the tax law, this seemingly generous act could result in an unexpected tax bill.

Some businesses and organizations must file Form 1099-C, Cancellation of Debt, when they forgive debts over a certain amount.

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Tags: Tax, Cancellation of Debt, Forgiveness of Debt

Tax Implications on Cancellation of Debt

Posted on Thu, Jun 12, 2014

To Forgive Is Not Always Divine

For tax purposes don't think that you're off the hook if another party forgives or cancels a debt. Under the "cancellation of debt" (COD) provision in the tax law, this seemingly generous act could result in an unexpected tax bill.

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Tags: Tax, EHTC Article, Tax Advisers, Articles, Cancellation of Debt, COD, Tax Consequences, Forgiveness of Debt