FAVORABLE DECISION FOR SHAREHOLDERS OF INSOLVENT S CORPS.Resolving a split among the 3rd, 6th, 7th, 10th and 11th Circuit Courts of Appeals, the U.S. Supreme Court decided Jan. 9 that an insolvent S INSOLVENT. This word has several meanings. It signifies a person whose estate is not sufficient to pay his debts. Civ. Code of Louisiana, art. 1980.. A person is also said to be insolvent, who is under a present inability to answer, in the ordinary course of business, the responsibility corporation's debt discharge income increased the basis of the shareholders stock in the corporation--even though this income was excluded from taxation. This increased basis permitted the shareholders to currently deduct de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. their share of the corporation's operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. . Refund claims should be filed, if appropriate, to reflect the high court's decision. (David A. Gitlitz, El Ux, Et Al v. Comm See comms. ., No. 99-1295.) |
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