Lehman Brothers Financial SA (LEHNQ)

[Joe Stocks]

>>YES AND DONT BE TOO STUBBORN TO IGNORE THE EXEMPTION TO COD INCOME
<<

Here again you do not understand the law. There is a difference between exemptions and exclusions. You read one line and avoid the rest because it does not suit your narrative. Here is what the IRS says about both;

EXCEPTIONS to Cancellation of Debt Income:

Amounts canceled as gifts, bequests, devises, or inheritances
Certain qualified student loans canceled under the loan provisions that the loans would be canceled if you work for a certain period of time in certain professions for a broad class of employers
Certain other education loan repayment or loan forgiveness programs to help provide health services in certain areas.
Amounts of canceled debt that would be deductible if you, as a cash basis taxpayer, paid it
A qualified purchase price reduction given by the seller of property to the buyer
Amounts from student loans discharged on the account of death or total and permanent disability of the student.

Amounts that meet the requirements for any of the following exclusions aren't included in income, even though they're cancellation of debt income.
EXCLUSIONS from Gross Income:

Debt canceled in a Title 11 bankruptcy case
Debt canceled to the extent insolvent
Cancellation of qualified farm indebtedness
Cancellation of qualified real property business indebtedness
Cancellation of qualified principal residence indebtedness that is discharged subject to an arrangement that is entered into and evidenced in writing before January 1, 2021

Generally, if you exclude canceled debt from income under one of the exclusions listed above, you must reduce certain tax attributes (certain credits and carryovers, losses and carryovers, basis of assets, etc.) (but not below zero) by the amount excluded.

LBHI does not qualify for and exemptions. So get that out of your head. They may qualify for debt canceled in a chapter 11 but it is very clear that income must reduce NOLs by an equal amount. And, that is exactly what Lehman says in their filings.