Final Regulations for Cancellation of Debt Income Involving Partnerships with Disregarded Entities and Grantor Trusts as Partners
June 22, 2016
Cancellation of Indebtedness Income
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Treasury recently finalized regulations clarifying the application of the bankruptcy and insolvency exceptions to cancellation of debt income involving a debtor partnership with one or more partners that are disregarded for income tax purposes. Section 108(a)(1)(A) and (B) exclude cancellation of debt from income if the cancellation or discharge occurred…