Businesses' Failure to Consider State Tax Treatment of Cancellation of Debt May Result in Lost Opportunities & Penalties

ARLINGTON, Va., Nov. 16, 2010 /PRNewswire-USNewswire/ -- Most states follow and/or adopt the federal income tax treatment of cancellation of indebtedness (COD) income under I.R.C. Section 108(a) as it relates to corporate taxpayers that are either insolvent or in bankruptcy. But few states provide clear guidance about whether to follow federal attribute reduction rules under Section 108(b) as well, according to a team of Ernst & Young tax experts in a new BNA Tax & Accounting webinar, State Tax Treatment of Cancellation of Indebtedness Income.

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"Failure to consider the state tax treatment of COD income may result in an unexpected tax liability or loss of a tax planning opportunity," says BNA Tax & Accounting Assistant Managing Editor and senior tax analyst Steven Roll.  "The November 18th event will address key state income tax issues that may arise in this context."  

In 60-90 minutes, the Ernst & Young panelists will:

• Discuss state conformity to Sections 108(a) and (b),
• Identify the states that have taken practical approaches to conform to Section 108(b), and some that have not,
• Give examples of arguments against the reduction of attributes that have prevailed at the state level,
• Review the laws in states that specifically address the reduction of attributes,
• Demonstrate how to determine COD income at the state level, and
• Illustrate issues that are likely to come up for multistate taxpayers.

About the Speakers

Steve Wlodychak is a Principal with Ernst & Young LLP's Transaction Advisory Services/State and Local Tax group. Based in Los Angeles, Steve focuses on the state and local tax treatment of mergers and acquisitions and reorganizations, as well as state and local tax bankruptcy and restructuring practice.

Traci Reed Mitchell is Co-Author and Senior Manager, Ernst & Young LLP's Transaction Advisory Services.

Chris Barras is Executive Director, Ernst & Young LLP's State and Local Tax Practice.

State Tax Treatment of Cancellation of Indebtedness Income will take place November 18, 2010, from 12:30 pm – 2:00 pm, ET. Register for this webinar and obtain further information about CLE and CPE credits, go to http://www.bnatax.com/state-codi-webinar/?open&cmpid=tmtxpr2010 or call 1-800-372-1033, menu Option 6, then Option 1. The per site fee is $249.

To receive automatic, email notification of upcoming BNA webinars that may be of interest to you, go to: http://www.bna.com/emailsignup.htm

About BNA Tax & Accounting Webinars

BNA Tax & Accounting is the foremost source of tax and accounting research, news, practice tools, and guidance for tax attorneys, CPAs, corporate tax managers, estate planners, and financial accountants.  Designed for today's busy practitioners, our webinars offer the same expertise and relevance that are the hallmark of all BNA Tax & Accounting resources. In just 60-90 minutes, practitioners gain in-depth knowledge on a current tax or accounting topic from experts in that area — and benefit from practical applications that can be put to work immediately. Conference attendees have the opportunity to ask the speakers questions, and may be eligible to earn CLE or CPE credits — all from the convenience of their own office or conference room.

SOURCE BNA Tax & Accounting