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Florida Tax Review

Abstract

This Article explores the tax treatment of cross-collateral nonrecourse debt. When using the term cross-collateral debt, we are referring to non¬recourse 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 lia¬bility 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.

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