Internal Revenue Service Issues Correction to Temporary Regulations on Deferred Indebtedness Income and Original Issue Discount Deductions

Summary

The IRS has corrected temporary regulations regarding the acceleration of deferred discharge of indebtedness income and original issue discount deductions for C corporations, primarily affecting the calculation of earnings and profits as a result of an election under section 108(i). The correction also applies to all taxpayers regarding deferred original issue discount deductions under section 108(i) following a reacquisition of an applicable debt instrument.