It is an unlucky fact that as the financial repercussions of the COVID-19 pandemic proceed to be felt, businesses — even those people that were executing pretty strongly at the start out of 2020 — will deal with considerable headwinds, if they have not already. Numerous may perhaps have to have to take into account some sort of restructuring of their balance sheet and debt obligations to make a sustainable enterprise product that positions them for results in 2021 and over and above.
These businesses that figure out that restructuring is the ideal route ahead have to have to realize, even so, that it will not magically make all of their bills and tax obligations disappear. In point, any time there is a foreclosure of assets, an exchange of assets for debt, or a reduction of debt, a taxable event is developed. Failure to take into account the tax implications