Discharge of Indebtedness: For a Solvent Farm Debtor
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Until 1987, a procedure was available for avoiding income tax for solvent debtors generally. That procedure involved an election to reduce the income tax basis of depreciable assets for qualified business indebtedness. However, that elective procedure was repealed in 1986 effective at the end of that year.
The same legislation repealing the solvent debtor rule enacted a provision for solvent farm debtors. The statute was amended substantially in 1988.