Tax and Cross-Collateralized Nonrecourse Liability
24 Florida Tax Review __ (2021)
20 Pages Posted: 9 Sep 2020
Date Written: August 2020
This article explores the tax treatment of cross-collateral nonrecourse debt. When using the term cross-collateral debt, we are referring to nonrecourse debt that is connected with more than one piece of property. While tax issues concerning cross-collateralized properties can arise in several circumstances, the focus of this article is on the tax treatment of a transfer of property subject to a cross-collateralized nonrecourse liability to a controlled corporation in exchange for stock that qualifies for some or all nonrecognition under § 351. The article also discusses two other tax issues involving cross-collateralized nonrecourse liability – namely, cancellation of debt and determination of basis issues.
Keywords: Taxation, Cross-Collateral, Nonrecourse, Debt, Liability, Basis
JEL Classification: H20, H25
Suggested Citation: Suggested Citation