Question 65 of 75. Which of the following statements is correct regarding tax at

Question

Question 65 of 75. Which of the following statements is correct regarding tax attributes? Generally, the amount of canceled debt must be used to reduce tax attributes in a particular order O The debtor may choose to use all or part of the amount of canceled debt to reduce the basis of depreciable property before reducing other tax attributes ? Except for credit carry overs, reduce the tax attributes S1 tor each dollar or canceled debt that is excluded tom ncome O Both statements 1 and 2 are true as they relate to tax attributes JMark for foilow up

Explanation / Answer

d) both statements 1 and 2 are true as they relate to tax attributes Because If a debtor excludes canceled debt from income so, it is canceled in a bankruptcy case or during insolvency he or she must use the excluded amount to reduce certain tax attributes.

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