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26 U.S.C. § 1017 — Discharge of indebtedness
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** If—
(1) an amount is excluded from gross income under subsection (a) of section 108 (relating to discharge of indebtedness), and
(2) under subsection (b)(2)(E), (b)(5), or (c)(1) of section 108, any portion of such amount is to be applied to reduce basis,
then such portion shall be applied in reduction of the basis of any property held by the taxpayer at the beginning of the taxable year following the taxable year in which the discharge occurs.
**(b) Amount and properties determined under regulations**
(1) **In general** — The amount of reduction to be applied under subsection (a) (not in excess of the portion referred to in subsection (a)), and the particular properties the bases of which are to be reduced, shall be determined under regulations prescribed by the Secretary.
(2) **Limitation in title 11 case or insolvency** — In the case of a discharge to which subparagraph (A) or (B) of section 108(a)(1) applies, the reduction in basis under subsection (a) of this section shall not exceed the excess of—
(A) the aggregate of the bases of the property held by the taxpayer immediately after the discharge, over
(B) the aggregate of the liabilities of the taxpayer immediately after the discharge.
The preceding sentence shall not apply to any reduction in basis by reason of an election under section 108(b)(5).
(3) **Certain reductions may only be made in the basis of depreciable property**
(A) *In general* — Any amount which under subsection (b)(5) or (c)(1) of section 108 is to be applied to reduce basis shall be applied only to reduce the basis of depreciable property held by the taxpayer.
(B) *Depreciable property* — For purposes of this section, the term “depreciable property” means any property of a character subject to the allowa
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Source file: Laws/federal/codes/united-states-code/title-26/section-1017-discharge-of-indebtedness--67c6c13d23.md
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Source location: Title 26, Chapter 1, § 1017; chapter-001-normal-taxes-and-surtaxes.md
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**(a) General rule** If—
(1) an amount is excluded from gross income under subsection (a) of section 108 (relating to discharge of indebtedness), and
(2) under subsection (b)(2)(E), (b)(5), or (c)(1) of section 108, any portion of such amount is to be applied to reduce basis,
then such portion shall be applied in reduction of the basis of any property held by the taxpayer at the beginning of the taxable year following the taxable year in which the discharge occurs.
**(b) Amount and properties determined under regulations**
(1) **In general** — The amount of reduction to be applied under subsection (a) (not in excess of the portion referred to in subsection (a)), and the particular properties the bases of which are to be reduced, shall be determined under regulations prescribed by the Secretary.
(2) **Limitation in title 11 case or insolvency** — In the case of a discharge to which subparagraph (A) or (B) of section 108(a)(1) applies, the reduction in basis under subsection (a) of this section shall not exceed the excess of—
(A) the aggregate of the bases of the property held by the taxpayer immediately after the discharge, over
(B) the aggregate of the liabilities of the taxpayer immediately after the discharge.
The preceding sentence shall not apply to any reduction in basis by reason of an election under section 108(b)(5).
(3) **Certain reductions may only be made in the basis of depreciable property**
(A) *In general* — Any amount which under subsection (b)(5) or (c)(1) of section 108 is to be applied to reduce basis shall be applied only to reduce the basis of depreciable property held by the taxpayer.
(B) *Depreciable property* — For purposes of this section, the term “depreciable property” means any property of a character subject to the allowance for depreciation, but only if a basis reduction under subsection (a) will reduce the amount of depreciation or amortization which otherwise would be allowable for the period immediately following such reduction.
(C) *Special rule for partnership interests* — For purposes of this section, any interest of a partner in a partnership shall be treated as depreciable property to the extent of such partner’s proportionate interest in the depreciable property held by such partnership. The preceding sentence shall apply only if there is a corresponding reduction in the partnership’s basis in depreciable property with respect to such partner.
(D) *Special rule in case of affiliated group* — For purposes of this section, if—
(i) a corporation holds stock in another corporation (hereinafter in this subparagraph referred to as the “subsidiary”), and
(ii) such corporations are members of the same affiliated group which file a consolidated return under section 1501 for the taxable year in which the discharge occurs,
then such stock shall be treated as depreciable property to the extent that such subsidiary consents to a corresponding reduction in the basis of its depreciable property.
(E) *Election to treat certain inventory as depreciable property*
(i) *In general* — At the election of the taxpayer, for purposes of this section, the term “depreciable property” includes any real property which is described in section 1221(a)(1).
(ii) *Election* — An election under clause (i) shall be made on the taxpayer’s return for the taxable year in which the discharge occurs or at such other time as may be permitted in regulations prescribed by the Secretary. Such an election, once made, may be revoked only with the consent of the Secretary.
(F) *Special rules for qualified real property business indebtedness* — In the case of any amount which under section 108(c)(1) is to be applied to reduce basis—
(i) depreciable property shall only include depreciable real property for purposes of subparagraphs (A) and (C),
(ii) subparagraph (E) shall not apply, and
(iii) in the case of property taken into account under section 108(c)(2)(B), the reduction with respect to such property shall be made as of the time immediately before disposition if earlier than the time under subsection (a).
(4) **Special rules for qualified farm indebtedness**
(A) *In general* — Any amount which under subsection (b)(2)(E) of section 108 is to be applied to reduce basis and which is attributable to an amount excluded under subsection (a)(1)(C) of section 108—
(i) shall be applied only to reduce the basis of qualified property held by the taxpayer, and
(ii) shall be applied to reduce the basis of qualified property in the following order:
(I) First the basis of qualified property which is depreciable property.
(II) Second the basis of qualified property which is land used or held for use in the trade or business of farming.
(III) Then the basis of other qualified property.
(B) *Qualified property* — For purposes of this paragraph, the term “qualified property” has the meaning given to such term by section 108(g)(3)(C).
(C) *Certain rules made applicable* — Rules similar to the rules of subparagraphs (C), (D), and (E) of paragraph (3) shall apply for purposes of this paragraph and section 108(g).
**(c) Special rules**
(1) **Reduction not to be made in exempt property** — In the case of an amount excluded from gross income under section 108(a)(1)(A), no reduction in basis shall be made under this section in the basis of property which the debtor treats as exempt property under [section 522 of title 11](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section522&num=0&edition=prelim) of the United States Code.
(2) **Reductions in basis not treated as dispositions** — For purposes of this title, a reduction in basis under this section shall not be treated as a disposition.
**(d) Recapture of reductions**
(1) **In general** — For purposes of sections 1245 and 1250—
(A) any property the basis of which is reduced under this section and which is neither section 1245 property nor section 1250 property shall be treated as section 1245 property, and
(B) any reduction under this section shall be treated as a deduction allowed for depreciation.
(2) **Special rule for section 1250** — For purposes of section 1250(b), the determination of what would have been the depreciation adjustments under the straight line method shall be made as if there had been no reduction under this section.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general**
(1) **1-year carryback and 20-year carryforward** — If the sum of the business credit carryforwards to the taxable year plus the amount of the current year business credit for the taxable year exceeds the amount of the limitation imposed by subsection (c) of section 38 for such taxable year (hereinafter in this section referred to as the “unused credit year”), such excess (to the extent attributable to the amount of the current year business credit) shall be—
(A) a business credit carryback to the taxable year preceding the unused credit year, and
(B) a business credit carryforward to each of the 20 taxable years following the unused credit year,
and, subject to the limitations imposed by subsections (b) and (c), shall be taken into account under the provisions of section 38(a) in the manner provided in section 38(a).
(2) **Amount carried to each year**
(A) *Entire amount carried to first year* — The entire amount of the unused credit for an unused credit year shall be carried to the earliest of the 21 taxable years to which (by reason of paragraph (1)) such credit may be carried.
(B) *Amount carried to other 20 years* — The amount of the unused credit for the unused credit year shall be carried to each of the other 20 taxable years to the extent that such unused credit may not be taken into account under section 38(a) for a prior taxable year because of the limitations of subsections (b) and (c).
(3) **5-year carryback for marginal oil and gas well production credit** — Notwithstanding subsection (d), in the case of the marginal oil and gas well production credit—
(A) this section shall be applied separately from the business credit (other than the marginal oil and gas well production credit),
(B) paragraph (1) shall be applied
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 39
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Married individuals filing joint returns and surviving spouses** There is hereby imposed on the taxable income of—
(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $36,90015% of taxable income. Over $36,900 but not over $89,150$5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000$20,165, plus 31% of the excess over $89,150. Over $140,000 but not over $250,000$35,928.50, plus 36% of the excess over $140,000. Over $250,000$75,528.50, plus 39.6% of the excess over $250,000.
**(b) Heads of households** There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $29,60015% of taxable income. Over $29,600 but not over $76,400$4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500$17,544, plus 31% of the excess over $76,400. Over $127,500 but not over $250,000$33,385, plus 36% of the excess over $127,500. Over $250,000$77,485, plus 39.6% of the excess over $250,000.
**(c) Unmarried individuals (other than surviving spouses and heads of households)** There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $22,10015% of taxable income. Over $22,100 but not over $53,50
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** In this section—
(1) “dependent” includes spouse, whether or not actually dependent; and
(2) “value” means fair market value as of the date of the filing of the petition or, with respect to property that becomes property of the estate after such date, as of the date such property becomes property of the estate.
**(b)**
(1) Notwithstanding [section 541 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section541&num=0&edition=prelim), an individual debtor may exempt from property of the estate the property listed in either paragraph (2) or, in the alternative, paragraph (3) of this subsection. In joint cases filed under [section 302 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section302&num=0&edition=prelim) and individual cases filed under section 301 or 303 of this title by or against debtors who are husband and wife, and whose estates are ordered to be jointly administered under Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, one debtor may not elect to exempt property listed in paragraph (2) and the other debtor elect to exempt property listed in paragraph (3) of this subsection. If the parties cannot agree on the alternative to be elected, they shall be deemed to elect paragraph (2), where such election is permitted under the law of the jurisdiction where the case is filed.
(2) Property listed in this paragraph is property that is specified under subsection (d), unless the State law that is applicable to the debtor under paragraph (3)(A) specifically does not so authorize.
(3) Property listed in this paragraph is—
(A) subject to subsections (o) and (p), any property that is exempt under Federal law, other than subsection (d) of this section, or State or local law th
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 522
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Allowance of deduction**
(1) **General rule** — There shall be allowed as a deduction any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary.
(2) **Corporations on accrual basis** — In the case of a corporation reporting its taxable income on the accrual basis, if—
(A) the board of directors authorizes a charitable contribution during any taxable year, and
(B) payment of such contribution is made after the close of such taxable year and on or before the 15th day of the fourth month following the close of such taxable year,
then the taxpayer may elect to treat such contribution as paid during such taxable year. The election may be made only at the time of the filing of the return for such taxable year, and shall be signified in such manner as the Secretary shall by regulations prescribe.
(3) **Future interests in tangible personal property** — For purposes of this section, payment of a charitable contribution which consists of a future interest in tangible personal property shall be treated as made only when all intervening interests in, and rights to the actual possession or enjoyment of, the property have expired or are held by persons other than the taxpayer or those standing in a relationship to the taxpayer described in section 267(b) or 707(b). For purposes of the preceding sentence, a fixture which is intended to be severed from the real property shall be treated as tangible personal property.
**(b) Percentage limitations**
(1) **Individuals** — In the case of an individual, the deduction provided in subsection (a) shall be limited as provided in the succeeding subparagra
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 170
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Exclusion from gross income**
(1) **In general** — Gross income does not include any amount which (but for this subsection) would be includible in gross income by reason of the discharge (in whole or in part) of indebtedness of the taxpayer if—
(A) the discharge occurs in a title 11 case,
(B) the discharge occurs when the taxpayer is insolvent,
(C) the indebtedness discharged is qualified farm indebtedness,
(D) in the case of a taxpayer other than a C corporation, the indebtedness discharged is qualified real property business indebtedness, or
(E) the indebtedness discharged is qualified principal residence indebtedness which is discharged—
(i) before January 1, 2026, or
(ii) subject to an arrangement that is entered into and evidenced in writing before January 1, 2026.
(2) **Coordination of exclusions**
(A) *Title 11 exclusion takes precedence* — Subparagraphs (B), (C), (D), and (E) of paragraph (1) shall not apply to a discharge which occurs in a title 11 case.
(B) *Insolvency exclusion takes precedence over qualified farm exclusion and qualified real property business exclusion* — Subparagraphs (C) and (D) of paragraph (1) shall not apply to a discharge to the extent the taxpayer is insolvent.
(C) *Principal residence exclusion takes precedence over insolvency exclusion unless elected otherwise* — Paragraph (1)(B) shall not apply to a discharge to which paragraph (1)(E) applies unless the taxpayer elects to apply paragraph (1)(B) in lieu of paragraph (1)(E).
(3) **Insolvency exclusion limited to amount of insolvency** — In the case of a discharge to which paragraph (1)(B) applies, the amount excluded under paragraph (1)(B) shall not exceed the amount by which the taxpayer is insolvent.
**(b) Reduction of tax attributes**
(
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 108
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Federal law — U.S. Code and appendices · legal_authorities
Page 2266
TITLE 26—INTERNAL REVENUE CODE
§ 1017
tirement-straight line property as hereinafter provided
in this section (including such property for periods
when held by predecessors of the taxpayer).
‘‘(c)
RETIREMENT-STRAIGHT
LINE
PROPERTY
DE-
FINED.—For purposes of this section, the term ‘retire-
ment-straight line property’ means any property of a
kind or class with respect to which the taxpayer or a
predecessor (under the terms and conditions prescribed
for him by the Commissioner) for any taxable year be-
ginning after December 31, 1940, and before January 1,
1956, changed from the retirement to the straight line
method of computing the allowance of deductions for
depreciation.
‘‘(d) BASIS
ADJUSTMENTS
AS
OF
1956 ADJUSTMENT
DATE.—If the taxpayer has made an election under this
section, then in determining the adjusted basis on his
1956 adjustment date of all retirement-straight line
property held by the taxpayer, in lieu of the adjust-
ments for depreciation provided in section 1016(a)(2)
and (3) of the Internal Revenue Code of 1986 [formerly
I.R.C. 1954], the following adjustments shall be made
(effective as of his 1956 adjustment date) in respect of
all periods before the 1956 adjustment date:
‘‘(1) DEPRECIATION SUSTAINED BEFORE MARCH 1, 1913.—
For depreciation sustained before March 1, 1913, on
retirement-straight line property held by the tax-
payer or a predecessor on such date for which cost
was or is claimed as basis and which either—
‘‘(A) RETIRED BEFORE CHANGEOVER.—Was retired
by the taxpayer or a predecessor before the change-
over date, but only if (i) a deduction was allowed in
computing net income by reason of such retire-
ment, and (ii) such deduction was computed on the
basis of cost without adjustment for depreciation
sustai
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 1017
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