As the Coronavirus Pandemic impacts the global economy, a key concern for businesses, beyond those of the health and welfare of their clients and team, is the need to understand the effect of economic conditions on debt instruments. A temporary forbearance on required debt payments can cause a modification of a debt instrument that can have significant tax implications. While the government may at some point pass legislation to help lessen the tax impact of debt modifications, it is important that businesses begin to understand the current tax framework, and what current and future tax ramifications may exist between the debtor and creditor.
Join members of CohnReznick’s National Tax and Restructuring Teams as we review:
- Common options for debt restructuring
- Mechanisms for restructuring debt (out of court workout, bankruptcy, etc.)
- Debt restructuring - When does a debt modification rise to the level of a taxable exchange resulting in a new modified debt instrument.
- Discharge of indebtedness income to a borrower, and exceptions to current income recognition
- Original Issue Discount rules for the new modified debt instrument and the tax impact for debtors and creditors.
- Gains/losses triggered to lenders as part of a taxable exchange of old debt instruments for new debt instruments
- Bad debt losses to creditors, character of gain/loss on the exchange of old debt for new debt
Please note the webinar will be played through your web browser. Speakers or a headset is required.