CFR 26-1.108(i)-2-2013 Internal revenue. Part1:Income taxes (continued). Section1.108(i)–2:Application of section 108(i) to partnerships and s corporations.
Overview. Under section 108(i), a partnership or an S corporation may elect to defer COD income arising in connection with a reacquisition of an applicable debt instrument for the deferral period. COD income deferred under section 108(i) is included in gross income ratably over the inclusion period, or earlier upon the occurrence of any acceleration event described in paragraph (b)(6) or (c)(3) of this section. If a debt instrument is issued (or treated as issued under section 108(e)(4)) in a debt-for-debt exchange described in section 108(i)(2)(A) or a deemed debtfor- debt exchange described in § 1.108(i)–3(a),