CPAs and Advisors with a Growth Agenda

Debt-for-Equity Interest Transfers

CB&H Launches Distressed Asset Recovery Services

The present volume of other real estate owned (OREO) and non-performing assets (NPA) presents an extraordinary challenge to lenders โ€“ and traditional solutions do not always apply. Foreclosure actions and online marketplaces often result in inadequate auction bids. Banks with OREO and NPA are often asking more than buyers are willing to pay. However, they often need to maintain their asking price in order to avoid realizing additional REO and loan losses and negatively affecting their overall capital. Attempts to sell the property can often result in additional costs to the bank from removing liens and other expenses. Real estate. Read More.

How Can You Improve Your Company’s Cash Flow in an Uncertain Economy?

Debt foreclosures, reductions and restructurings can create unexpected income tax consequences from Cancellation of Indebtedness (COD) income โ€” whether in a solvent, insolvent, or bankruptcy workout situation. While these consequences can reduce the cash on hand you need for future deals and operations, there are tax planning opportunities available to corporations, partnerships and sole proprietors to defer or even eliminate such income tax liabilities and maximize your cash flow. Solvent taxpayers can explore options for accelerating losses and Net Operating Loss Carrybacks . Under certain circumstances, debt may be contributed to partnerships in exchange for equity. Insolvent taxpayers and taxpayers entering Bankruptcy pursuant to Chapter 11 may eliminate. Read More.

Partnership Debt-For-Equity Interest Transfers

The American Jobs Creation Act of 2004 amended IRC ยง108(e)(8) to include discharges of partnership indebtedness occurring on or after October 22, 2004. Prior to the amendment, this section only applied to discharges of corporate indebtedness in exchange for stock. If a debtor partnership transfers a capital or profits interest in the partnership to a creditor in satisfaction for a recourse or non-recourse debt, then the fair market value (FMV) of the interest is treated as satisfying the debtor partnership’s indebtedness to the creditor. The IRS has issued proposed regulations under ยง1.108-8 holding that the FMV of partnership interest transferred. Read More.