- 4 -
bankruptcy estate, the contributing partners would be discharged
from liability as permitted by the
confirmed bankruptcy plan. Petitioner executed a contribution
agreement and pursuant to its terms contributed $15,530 to the
partnership’s bankruptcy estate in exchange for release of claims
and potential claims of all creditors against petitioner arising
out of or related to the partnership.
On December 19, 1995, the bankruptcy court entered an order
approving the contribution agreement. In its order, the
bankruptcy court specifically discharged and released petitioner
from any and all liability to the trustee and the bank arising
out of or relating to the partnership, petitioner’s status as a
general partner in the partnership, and the April 9, 1985,
personal guaranty agreement. In addition, the bankruptcy court’s
order released petitioner from “the claims or potential claims of
all creditors” of the partnership. The bankruptcy court further
ordered that petitioner “is subject to the jurisdiction of the
Bankruptcy Court.”
Tax Reporting
For the 1995 tax year, the partnership issued petitioner a
Schedule K-1, Partner’s Share of Income, Credits, Deductions,
etc., allocating to him $405,815 of discharge of indebtedness
income. Petitioners excluded $380,699 of this amount from their
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011