If an S Corporation Excludes Cancellation of Debt (COD) Income

question 8

Short Answer

If an S corporation excludes cancellation of debt (COD) income from gross income, the excluded amount is applied to _________________ S corporation tax attributes.

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Definitions:

FOB Destination

Freight terms in which the seller pays the transportation costs from the shipping point to the final destination.

Net Income

The total earnings of a company after deducting all expenses and taxes from total revenue.

Ending Inventory

The total value of all unsold goods that a company has at the end of an accounting period.

Beginning Inventory

The value of the inventory that a company has at the start of an accounting period, before any purchases or sales have occurred.