R
rtd21
A partnership has $1 million in unpaid trade accounts payable and no
assets, with judgements against it by the vendors for the $1 million
of trade ap. The partnership is winding up and preparing its final
Form1065.
When the partnership reports the $1 million of income out to its
partners on final K-1s, are there cases where the income can be
reported as a type of income the partner can get out of reporting as
taxable, by inciting the "insolvent outside of bankruptcy" exception
to recognizing income from debt relief?
assets, with judgements against it by the vendors for the $1 million
of trade ap. The partnership is winding up and preparing its final
Form1065.
When the partnership reports the $1 million of income out to its
partners on final K-1s, are there cases where the income can be
reported as a type of income the partner can get out of reporting as
taxable, by inciting the "insolvent outside of bankruptcy" exception
to recognizing income from debt relief?