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Debt Forgiveness

IRS provides tax relief to certain students whose education loans were discharged

IRS provides tax relief to certain students whose education loans were discharged

Rev Proc 2015-57, 2015-51 In a Revenue Procedure, IRS has provided that taxpayers who took out Federal student loans to finance attendance at certain schools, and whose loans were discharged under the Department of Education’s Defense to Repayment or Closed School discharge processes, will not have to recognize gross income as a result of the […]

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No deduction for partially worthless debts where charge-off requirement not met

No deduction for partially worthless debts where charge-off requirement not met

Legal Advice Issued by Field Attorneys 20153501F In Legal Advice Issued by Field Attorneys (LAFA), IRS has concluded that a taxpayer couldn’t deduct partially worthless debts because it failed to charge off the amounts on its books during the tax year.Click here for Legal Advice Issued by Field Attorneys 20153501F. Background. A deduction is allowed for […]

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Chief Counsel Advice: Regs on partner’s share of liabilities don’t control whether debt is recourse for other purposes

Chief Counsel Advice: Regs on partner’s share of liabilities don’t control whether debt is recourse for other purposes

Chief Counsel Advice 201525010 In Chief Counsel Advice (CCA), IRS has concluded that, for purposes of determining whether a limited liability company (LLC) taxed as a partnership has either cancellation of debt (COD) income under Code Sec. 61(a)(12) or gains from dealings in property under Code Sec. 61(a)(3) upon foreclosure of its property, the regs […]

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Regs delay effective date of certain reporting by brokers on debt instrument transfers

Regs delay effective date of certain reporting by brokers on debt instrument transfers

T.D. 9713, 06/04/2015; Reg. § 1.6045A-1T IRS has amended recently issued temporary regs on certain information reporting by brokers on transfers of debt instruments. The amendment postpones the date for reporting certain information on a transfer statement six months, from June 30, 2015, to Jan. 1, 2016. Background. Code Sec. 6045A requires a broker transferring […]

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Tax Court holds forgiveness of loan to doctor for his staying in underserved community gave rise to income

Tax Court holds forgiveness of loan to doctor for his staying in underserved community gave rise to income

Wyatt, TC Summary Opinion 2015-31   The Tax Court has held that guaranteed payments made from a hospital in an underserved community to a doctor as part of its efforts to recruit and retain physicians, which he wasn’t required to repay because he stayed in the community, constituted bona fide loans, the forgiveness of which […]

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YouTube: Mortgage Debt Forgiveness

YouTube: Mortgage Debt Forgiveness

We have extensively blogged on the “mortgage debt forgiveness” and tax consequences. For example: IRS explains consequences of receipt of mortgage settlement due to foreclosure Revenue Ruling 2014-02 — National Mortgage Settlement Tax Tips: Mortgage Debt Forgiveness: 10 Key Points Pay Off That Mortgage Now! Reverse Mortgage Defaults Rising Taxpayers may not need to report […]

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Mortgage foreclosure was passive activity disposition despite COD income exclusion

Mortgage foreclosure was passive activity disposition despite COD income exclusion

In Chief Counsel Advice 201415002, IRS has concluded that a foreclosure on real property subject to recourse debt qualifies as a fully taxable disposition for purposes of the disposition-of-passive-activity rules, even though the taxpayer’s cancellation of debt (COD) income that resulted from the foreclosure was excluded under Code Sec. 108. Background. Code Sec. 61(a)(12) provides […]

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How do I Report a Short Sale?

How do I Report a Short Sale?

How do I report a short sale?, an article by the California Franchise Tax Board (FTB). In prior issues of Tax News we have addressed several issues related to foreclosures. In our February 2010 issue, we addressed how the State of California civil procedures interact with the Internal Revenue Code 108. Four questions repeatedly come […]

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Revenue Ruling 2014-02 — National Mortgage Settlement

Revenue Ruling 2014-02 — National Mortgage Settlement

Revenue Ruling 2014-02 explains the tax treatment of payments to homeowners pursuant to the National Mortgage Settlement due to the foreclosure of their principal residences. Here are some snippets. ISSUES 1. If a taxpayer receives a payment pursuant to the National Mortgage Settlement due to the foreclosure of the taxpayer’s principal residence (“NMS Payment”), what […]

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IRS explains consequences of receipt of mortgage settlement due to foreclosure

IRS explains consequences of receipt of mortgage settlement due to foreclosure

In Revenue Ruling 2014-2, 2014-2 IRB, IRS has explained the tax treatment of payments to homeowners under the National Mortgage Settlement due to the foreclosure of their principal residences. Background. Under Code Sec. 121(a), a taxpayer can exclude from income up to $250,000 of gain from the sale of a home owned and used by […]

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The Taxable Downside of Debt Forgiveness

The Taxable Downside of Debt Forgiveness

As reported in the WSJ, you may have shored up your finances by settling most nonmortgage debt with creditors in 2012, but there’s no escaping the tax man: The Internal Revenue Service expects you to pay taxes on that dodged debt, which is now considered “income.”  “When you borrow money it’s not a taxable event […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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Member CA Bar Member Orange County Bar US Tax Court Attorney