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SECTION 5. EFFECTIVE DATE

Internal Revenue Bulletin 2014-9 · 2026-10-03 edition · updated 2026-10-04 · United States

This revenue procedure is effective for taxpayers who make an election under § 108(c)(3) regarding discharged indebtedness on or after February 5, 2014.

DRAFTING INFORMATION

The principal author of this revenue procedure is Seoyeon Sharon Park of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue procedure, contact Ms. Park at (202) 317-7006 (not a toll-free number).

(3) Borrower pledges to the lender a first priority security interest in Borrower’s ownership interest in Property Owner. Any further encumbrance on the pledged ownership interest must be subordinate to the lender’s security interest in Property Owner.

(4) At least 90 percent of the fair market value of the total assets (immediately before the discharge) directly owned by Property Owner must be real property used in a trade or business and any other assets held by Property Owner must be incidental to Property Owner’s acquisition, ownership, and operation of the real property.

(5) Upon default and foreclosure on the indebtedness, the lender will replace Borrower as the sole member of Property Owner.

.04 If a taxpayer does not meet the requirements of this safe harbor, it is not precluded from arguing, based on facts and circumstances, that its debt satisfies the “secured by” requirement of § 108(c)(3)(A).

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▸Contents — Internal Revenue Bulletin 2014-9
Internal Revenue Bulletin 2014-9

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