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Abstract: 

Due to the proliferation of distressed debt, and the unfair tax results levied upon the purchasers and holders of such debt under current law, both the New York State Bar Association and the American Bar Association have issued reports setting forth proposals for modification of the tax law. The modifications would change current tax law to take into account the nature of the debt, and provide more equitable results to the purchasers and holders of distressed debt.

Keywords: distressed debt; doubtful collectability; payment ordering rule; market discount—non-accrual

Affiliations:  1: Twenty-First Securities Corp.