Tax Issues Involving Distressed Debt (Completed)

Date: Thursday, May 13, 2021
Instructor: Jennifer Kowal
Begin Time:  12:00pm Pacific Time
1:00pm Mountain Time
2:00pm Central Time
3:00pm Eastern Time
CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

Despite special CARES Act and Consolidated Appropriations Act provisions designed to keep businesses afloat during the economic downturn, many borrowers are likely to have trouble making interest and principal payments on debt obligations this year. In many cases, the CARES Act and Consolidated Appropriations Act do not change the general tax rules that apply to debtors and lenders. This webinar covers important tax consequences and considerations for holders and issuers of distressed debt.

Who Should Attend
Tax practitioners at all levels who advise borrowers who may be renegotiating debts or lenders holding or acquiring distressed debt.

Topics Covered

  • Tax consequences to holders of purchasing distressed debt at a discount and later resale
  • Debt modification rules in context of debt workouts, from both holder and issuer perspectives
  • OID and interest accrual on distressed debt

Learning Objectives

  • Recognize how modifying terms of debt instruments may result in income/loss to holder and issuer
  • Describe the consequences of acquiring distressed debt at discount and holding until maturity or resale
  • Discuss cancellation of indebtedness consequences for pass through entity borrowers
  • Identify common issues involving interest accrual and interest deduction for distressed debt


Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites

Advance Preparation

 Chat — Books Support