Debt Cancellation in S Corp

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  • Jim R
    Junior Member
    • Dec 2005
    • 25
    #1

    Debt Cancellation in S Corp

    A S Corp had the debt in its Line of Credit cancelled when the sole shareholder filed Chapter 7 bankruptcy. Would this be income to the corporation?
    Tags: None
    • dsi
      Senior Member
      • Dec 2005
      • 705
      #2
      Jim,
      Was the debt in the name of the s-corp, or in the name of the SH?
      Dave, EA

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        • Jim R
          Junior Member
          • Dec 2005
          • 25
          #3
          It was an unsecured line of credit in the name of the corporation.

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