The law allows taxpayers to defer for 5 years taxation of certain income arising in 2009 or 2010. Taxpayers then must include the deferred amount in income ratably over 5 years. The election statement advises that a taxpayer makes the election and the election and information statements provide information necessary to track the income. Respondents are C corporations and other persons in a business that reacquire debt instruments . This revenue procedure provides the exclusive procedures for taxpayers to make an election to defer recognizing discharge of indebtedness income (cancellation of debt, or COD income) under § 108(i) of the Internal Revenue Code.
Section 1231 of Pub. L. No. 111-5 requires taxpayers to attach an election statement to the taxpayer's tax return to obtain a tax benefit. Information on how to make the election and what the statement must include must be published as early as possible to allow taxpayers sufficient time to determine whether to make the election and timely prepare and file their tax returns.
US Code:
26 USC 108(i)
Name of Law: Deferral and Ratable Inclusion of Income
PL: Pub.L. 111 - 5 1231 Name of Law: American recovery and Reinvestment Act of 2009
This revenue procedure provides the exclusive procedures for taxpayers to make an election to defer recognizing discharge of indebtedness income (cancellation of debt, or COD income) under § 108(i) of the Internal Revenue Code.
Section 1231 of Pub. L. No. 111-5 requires taxpayers to attach an election statement to the taxpayer's tax return to obtain a tax benefit.
The creation of this new requirement under section 108(i) of the Code results in a decrease in the number of respondents from 100,000 to 50,000. This was a result after analysis of the collection and the addition of a new category of respondents, foreign taxpayers that do not otherwise have to file a tax return. New information is being collected so the average burden hours per respondent was raised from one hour to six hours, with a range of two to eight hours depending on an individualÂs circumstance. These changes result in a total burden increase of 100,000 hours.
$0
No
No
Uncollected
Uncollected
Yes
Uncollected
Donna Crisalli 202 622-4920
No
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
Summary of Change Worksheet.doc
Supporting Statement.pdf
RP 2009-XX - Internal Revenue Code Section 108(i) Election