- 18 -
there must be an identifying event or other evidence to show that
a debt has, in fact, been discharged. See, e.g., United States
v. S.S. White Dental Manufacturing Co., supra at 401 (any
"identifiable event" which fixes the loss with certainty may be
taken into consideration); Exchange Sec. Bank v. United States,
supra at 1099; Bickerstaff v. Commissioner, 128 F.2d 366, 367
(5th Cir. 1942); Cozzi v. Commissioner, 88 T.C. at 444; Kent
Homes, Inc. v. Commissioner, 55 T.C. 820, 828-831 (1971), revd.
on other grounds 455 F.2d 316 (10th Cir. 1972); Cotton v.
Commissioner, 25 B.T.A. 1158 (1932), affd. 68 F.2d 1486 (D.C.
Cir. 1933).9 In this instance, there was no identifying event or
forgiveness on the part of the creditors that gave rise to
discharge of indebtedness income during the 1992 taxable year.
Cozzi v. Commissioner, supra. Accordingly, we hold that
petitioners' S corporation did not realize COD income for the
1992 taxable year.
Finally, even if the S corporation had realized COD income
for that year, we have held that, where such income is shielded
from recognition by section 108(d)(7)(A), it does not operate to
increase the basis of the shareholders. Nelson v. Commissioner,
9See also Brountas v. Commissioner, 74 T.C. 1062, 1074
(1980), supplementing 73 T.C. 491 (1979), vacated and remanded on
other grounds 692 F.2d 152 (1st Cir. 1982), affd. in part and
revd. in part on other grounds sub nom. CRC Corp. v.
Commissioner, 693 F.2d 281 (3d Cir. 1982).
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