Steve M Posted January 28, 2009 Report Share Posted January 28, 2009 One exclusion for debt forgiveness is qualified real property business indebtedness (other than C Corps). I believe that is referring to forgiveness of debt on real property owned by the business (real estate). Would this exclusion also apply to rental property? I am assuming that cancellation of debt on rental properties is taxable, but wonder if some of you have some experience or opinion on the matter. Steve M Quote Link to comment Share on other sites More sharing options...
ed_accountant Posted January 28, 2009 Report Share Posted January 28, 2009 I am guessing no. I believe the intention of forgiveness of debt was for "Home owners" not investors . Quote Link to comment Share on other sites More sharing options...
jainen Posted January 28, 2009 Report Share Posted January 28, 2009 >>forgiveness of debt on real property owned by the business<< It's not exactly "forgiveness." For business real estate the cancellation of debt is excluded from income, but is reflected in a basis adjustment which presumably will increase gain. The adjustment also affects other tax attributes such as loss carryovers. You will need to research this subject to see how it applies to any particular taxpayer. Quote Link to comment Share on other sites More sharing options...
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