Paul L. Caron

Thursday, September 10, 2020

Kahn & Kahn: Tax And Cross-Collateralized Nonrecourse Liability

Douglas A. Kahn (Michigan) & Jeffrey H. Kahn (Florida State), Tax and Cross-Collateralized Nonrecourse Liability, 24 Fla. Tax Rev. __ (2021):

Florida Tax Review (2019)This article explores the tax treatment of cross-collateral nonrecourse debt. When using the term cross-collateral debt, we are referring to nonrecourse debt that is connected with more than one piece of property. While tax issues concerning cross-collateralized properties can arise in several circumstances, the focus of this article is on the tax treatment of a transfer of property subject to a cross-collateralized nonrecourse liability to a controlled corporation in exchange for stock that qualifies for some or all nonrecognition under § 351. The article also discusses two other tax issues involving cross-collateralized nonrecourse liability – namely, cancellation of debt and determination of basis issues.

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