Section 12 Tax Results to the Parties

• Library: Business Transitions 2009 Supp

On February 17, 2009, the American Recovery and Reinvestment
Act of 2009 (ARRA), Pub. L. No. 111-5, 123 Stat. 115, became law, bringing with it almost $800 billion of tax incentives for businesses and individuals, although incentives for the development of energy alternatives make up almost $300 billion of that amount. Two provisions of ARRA relating to business taxes are particularly worthy of note for clients considering business transfers.

The first provision permits a taxpayer to defer the recognition of cancellation of debt income (CODI). Before ARRA, a...