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Debt Cancellation in S Corp

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    #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?
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    #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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      #3
      It was an unsecured line of credit in the name of the corporation.

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