Lehman Brothers Financial SA (LEHNQ)

[SwissCheeseAccount]

Looks like toogood knew something after-all

https://www.thetaxadviser.com/issues/2023/apr/a-primer-on-cancellation-of-debt-income-and-exclusions.html

The bankruptcy and insolvency exclusions provided in Secs. 108(a)(1)(A) and (B) operate similarly to exclude COD income. However, it is critical for a tax professional to understand several distinctions between them. Consider the following example:

Example 1: Corporation D undergoes a debt workout in which $500 million of debt is discharged in exchange for (1) new debt of $200 million, (2) cash of $50 million raised from new senior creditors, and (3) preferred equity in Corporation D of $150 million. Corporation D reports $100 million of COD income in the transaction.