Tax Issues in Bankruptcy and Insolvency, Second Edition
By Willard D. Horwich, J.D., C.P.A..

Even when there’s no cash left, debtors and creditors can face heavy taxes, penalties, and interest in a business bankruptcy.  Turn to this authoritative resource for planning strategies and compliance guidelines that minimize the tax consequences of reorganization, restructuring, or liquidation ...

The last thing a debtor or creditor involved in a bankruptcy thinks about is a big tax bill: after all, what’s left to tax?  The unfortunate answer is often a lot more than expected.   Every restructuring of debt brings into play provisions of the Internal Revenue Code and hidden tax liability can add immeasurably to the cost of bankruptcy—for the business, for individual owners, and for creditors, too, who often have tax concerns directly related to the debtor's condition.  Worse, the tax problems related to bankruptcy and insolvency live on—especially after the fact of a business breakup—and the litigation can go on for years if tax issues are mishandled. 

Every restructuring of debt brings into play provisions of the Internal Revenue Code. 

Now, Tax Issues in Bankruptcy and Insolvency, Second Edition, leads you through all the problems you face in the bankruptcy process. The author has distilled his decades of legal and accounting experience so you can be sure to make a tax-savvy move at every decision point. You’ll learn:

  • How to avoid some tax problems before the actual bankruptcy filing
  • What tax filings you must turn over to the trustee and the creditors, and when
  • How to use the automatic stay to benefit your client
  • What you must do to protect net operating loss and capital loss carryovers
  • Tax traps that may be lurking in your workout plan
  • What partners, LLC members and S corporation shareholders can and cannot do to protect themselves from tax backfires
  • What constitutes taxable income from debt adjustment and cancellation

Tax Issues in Bankruptcy and Insolvency, Second Edition, brings together in a single, convenient source, a comprehensive and authoritative review of tax problems and procedure in bankruptcy and insolvency, as well as substantive law.  The text provides discussions of the principal authorities and citations to bankruptcy and related laws and regulations and leads the reader step-by-step through the range of problems typically encountered in business bankruptcy, with a special focus on what constitutes taxable income from debt adjustment and cancellation. Everything is explained in clear, jargon-free English, and backed up with hands-on planning pointers, clearly worked examples, and sample filings and forms.

Now get authoritative guidance for reducing to the legal minimum debtor’s and creditor’s tax liability through the whole insolvency/bankruptcy process ... 

  • How to avoid a big tax bill when debt is canceled in a Chapter 11 reorganization or Chapter 7 liquidation.
  • How to reduce or defer tax liability by electing a short tax year when filing under Chapter 7 or Chapter 11 ... and when a short-year is not the best choice.
  • What tax returns must be filed by the bankruptcy estate ... and step-by-step assistance in filing them.
  • Taking advantage of the automatic stay to defer collections when there are tax levies pending.
  • How to use a Chapter 11 proceeding as a negotiating device when dealing with the IRS collections process.
  • How to exploit the procedural remedies available when the government violates the automatic stay.
  • How to take immediate advantage of tax liabilities canceled in a Chapter 7 proceeding.
  • What to do when there is a federal tax lien on the debtor's property.
  • How to use the bankruptcy court to get a favorable ruling on taxes due when the government doesn’t file a claim in a bankruptcy proceeding.
  • How to defer or dispose of pending Tax Court proceedings after a bankruptcy petition is filed.
  • How to maximize the retained value of net operating losses, capital loss carryovers, and other tax attributes after a discharge of tax liabilities in bankruptcy. 
  • When and how to permit individual partners to claim losses during a partnership bankruptcy proceeding   How to permit S corporation shareholders to claim such loses.
  • When and how to use the statute of limitations to reduce or eliminate a tax liability.
  • How to protect bankrupt S corporation shareholders when there are tax claims that are no longer collectible.
  • How to minimize or eliminate the tax due when debtor’s Chapter 11 reorganization plan includes a statutory reorganization under the IRC. 

Related Publications:
Journal of Taxation of Investments

Journal of Taxation and Regulation of Financial Institutions




Table of Contents (PDF)
Format: Hardcover Book
© MMXII 462 pp.
ISBN: 978-1-887554-85-5
Price: US $184.50
Product Code: TBI2d



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