When it comes to the debt forgiveness rules, is all really forgiven?

By Steve Youn; Published in CPABC in Focus
Published: 03/10/2021
The recent economic downturn may bring forth unexpected tax issues. As creditors become more inclined to forgive or settle debt without full or even partial repayment, more corporations may find that they are settling debt for less than the principal amount. While this may initially seem like a favourable result for debtor corporations, there are tax implications that must be considered. Specifically, debtor corporations need to consider the impact of the debt forgiveness rules so they can plan accordingly.

When it comes to the debt forgiveness rules, is all really forgiven?
 
Photo credit: erhui1979/DigitalVision Vectors/Getty Images

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