Tax Facts

8126 / Is there any tax significance between the characterization of discharge of debt included in gross income under IRC Section 61(a)(1 than gain from the sale of property included in gross income under IRC Section 61(a)(3)?

Yes, as discussed in Q 8122, IRC Section 108 provides a number of exceptions that render all or part of discharge of debt income otherwise includible under IRC Section 61(a)(12) as being nontaxable. None of those exceptions apply to gain included in gross income under IRC Section 61(a)(3).

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