[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.108-4]

[Page 476]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.108-4  Election to reduce basis of depreciable property under 
section 108(b)(5) of the Internal Revenue Code .

    (a) Description. An election under section 108(b)(5) is available 
whenever a taxpayer excludes discharge of indebtedness income (COD 
income) from gross income under sections 108(a)(1)(A), (B), or (C) 
(concerning title 11 cases, insolvency, and qualified farm indebtedness, 
respectively). See sections 108(d)(2) and (3) for the definitions of 
title 11 case and insolvent. See section 108(g)(2) for the definition of 
qualified farm indebtedness.
    (b) Time and manner. To make an election under section 108(b)(5), a 
taxpayer must enter the appropriate information on Form 982, Reduction 
of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 
Basis Adjustment), and attach the form to the timely filed (including 
extensions) Federal income tax return for the taxable year in which the 
taxpayer has COD income that is excluded from gross income under section 
108(a). An election under this section may be revoked only with the 
consent of the Commissioner.
    (c) Effective date. This section applies to elections concerning 
discharges of indebtedness occurring on or after October 22, 1998.

[T.D. 8787, 63 FR 56562, Oct. 22, 1998]