Legal Opinion
William C. Witzel and Gene E. Witzel v. Commissioner of Internal Revenue
Court of Appeals for the Seventh Circuit
Decided January 18, 2000No. 99-2482PublishedCited by 7 opinions
1Opinion of the Court
POSNER, Chief Judge.
This is an appeal by taxpayers from a decision by the Tax Court (77 T.C.M. (CCH) 1487 (1999)) holding, consistently with Gitlitz v. Commissioner, 182 F.3d 1143 (10th Cir.1999), and Nelson v. Commissioner, 110 T.C. 114 (1998), that “discharge of indebtedness” (equivalently, “cancellation of debt”) income that is excluded from gross income under 26 U.S.C. § 108(a) does not pass through to a shareholder of a subchapter S corporation and therefore does not increase the shareholder’s basis.
A debt that is cancelled is income to the debtor, since he has been enriched by the…
2Cases cited4 opinions
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- United States v. Centennial Savings Bank FSBSupreme Court of the United States · 1991
- Nelson v. CommissionerUnited States Tax Court · 1998
- Witzel v. CommissionerUnited States Tax Court · 1999
3Cited by7 opinions
- Gitlitz v. CommissionerSupreme Court of the United States · 2001
- Salvador A. Gaudiano,et Al.,petitioners-Appellants v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 2000
- Gaudiano v. CIRCourt of Appeals for the Sixth Circuit · 2000
- Gitlitz v. CommissionerSupreme Court of the United States · 2001
- Gitlitz v. CommissionerSupreme Court of the United States · 2001
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