Tax Consequences of Discharged Indebtedness - Renegotiation and Foreclosure for Solvent and Insolvent Borrowers

摘要

Recent years have witnessed increasing concern over the growing debt burdens and declining savings rates of the average American household. These concerns are further amplified by growing speculation of a bubble in U.S. housing prices. A major correction in housing prices will almost certainly lead to a significant increase in debt defaults, and not only among individual homeowners. The tax consequences associated with debt defaults are a significant concern for practitioners and growing more so.