Project Description

For COD Income Exclusion under IRC Section 108(a)(1)(D), the IRS has clarified the definition of “Qualified Real Property Business Debt.” In Revenue Procedure 2014-20 (2014-9 IRB), the IRS has provided a safe harbor under which it will treat indebtedness of certain taxpayers that is secured by 100% of the ownership interest in a disregarded entity that holds real property, as indebtedness that is secured by real property for purposes of the income exclusion under Code Sec. 108(a)(1)(D). The safe harbor is effective for taxpayers who make an election to exclude an amount from income on or after Feb. 5, 2014.