26 USC 1398 - Rules relating to individuals’ title 11 cases

U.S Code last checked for updates: Nov 22, 2024

§ 1398.

Rules relating to individuals’ title 11 cases

(a)

Cases to which section applies

(b)

Exceptions where case is dismissed, etc.

(1)

Section does not apply where case is dismissed

(2)

Section does not apply at partnership level

(c)

Computation and payment of tax; basic standard deduction

(1)

Computation and payment of tax

(2)

Tax rates

(3)

Basic standard deduction

(d)

Taxable year of debtors

(1)

General rule

(2)

Election to terminate debtor’s year when case commences

(A)

In general

Notwithstanding section 442, the debtor may (without the approval of the Secretary) elect to treat the debtor’s taxable year which includes the commencement date as 2 taxable years—

(i)

the first of which ends on the day before the commencement date, and

(ii)

the second of which begins on the commencement date.

(B)

Spouse may join in election

(C)

No election where debtor has no assets

(D)

Time for making election

(E)

Returns

(F)

Annualization

(3)

Commencement date defined

(e)

Treatment of income, deductions, and credits

(1)

Estate’s share of debtor’s income

(2)

Debtor’s share of debtor’s income

(3)

Rule for making determinations with respect to deductions, credits, and employment taxes

Except as otherwise provided in this section, the determination of whether or not any amount paid or incurred by the estate—

(A)

is allowable as a deduction or credit under this chapter, or

(B)

is wages for purposes of subtitle C,

shall be made as if the amount were paid or incurred by the debtor and as if the debtor were still engaged in the trades and businesses, and in the activities, the debtor was engaged in before the commencement of the case.

(f)

Treatment of transfers between debtor and estate

(1)

Transfer to estate not treated as disposition

(2)

Transfer from estate to debtor not treated as disposition

(g)

Estate succeeds to tax attributes of debtor

The estate shall succeed to and take into account the following items (determined as of the first day of the debtor’s taxable year in which the case commences) of the debtor—

(1)

Net operating loss carryovers

(2)

Charitable contributions carryovers

(3)

Recovery of tax benefit items

(4)

Credit carryovers, etc.

(5)

Capital loss carryovers

(6)

Basis, holding period, and character of assets

(7)

Method of accounting

(8)

Other attributes

(h)

(1)

Administration, liquidation, and reorganization expenses

(2)

Carryback and carryover of excess administrative costs, etc., to estate taxable years

(A)

Deduction allowed

(B)

Administrative expense loss, etc.

(C)

Determination of amount carried to each taxable year

(D)

Administrative expense deductions allowed only to estate

(i)

Debtor succeeds to tax attributes of estate

(j)

Other special rules

(1)

Change of accounting period without approval

(2)

Treatment of certain carrybacks

(A)

Carrybacks from estate

(B)

Carrybacks from debtor’s activities

(C)

Carryback and carryback year defined

For purposes of this paragraph—

(i)

Carryback

(ii)

Carryback year

(Added Pub. L. 96–589, § 3(a)(1), Dec. 24, 1980, 94 Stat. 3397; amended Pub. L. 99–514, title I, § 104(b)(14), title XIII, § 1301(j)(8), title XVIII, § 1812(a)(5), Oct. 22, 1986, 100 Stat. 2105, 2658, 2833.)

cite as: 26 USC 1398