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NOTES 671 Tax Lawyer, Vol. 54, No. 3 NOTE ASSESSING S CORPORATION CANCELLATION OF DEBT INCOME ON SHAREHOLDERS’ INCOME AND BASIS IN THE S CORPORATION’S STOCK: GITLITZ V. COMMISSIONER* In Gitlitz v. Commissioner,1 the Supreme Court resolved the divergence of opinion in four of the federal circuit courts regarding the pass through of cancellattio of debt (“COD”) income2 to the shareholders of an insolvent S corporatiion3 The Supreme Court, in reaching its decision, held that COD income, as an “item...