Income Tax Consequences of Farm Debt Cancellation and Bankruptcy
Casler, George L.
Beginning in the mid-1980s, a substantial number of farmers suffered financial difficulties which led to debt restructuring, bankruptcy and consideration of liquidation alternatives. The Farmers Home Administration debt restructuring program which includes debt cancellation for some farmers has added to the concern about the tax consequences of debt cancellation. The primary purpose of this bulletin is to consider some of the income tax consequences of debt cancellation. A section on some of the income tax aspects of bankruptcy also is included.
E.B. 94·22 (Formerly A.E. Ext. 89-16)
Charles H. Dyson School of Applied Economics and Management, Cornell University