In Putoma Corp. the Tax Court decided that foregiveness of interest indebtedness owed by a corporation (which had deducted for the accrued but unpaid interest) to a shareholder did not result in taxable income to the corporation because the interest foregiveness was a contribution to capital. The authors dispute the court's analysis and suggest a framework for future decisions concerning this problem.
Steven M. Harris and Ronald B. Ravikoff,
Scope of Tax Benefit Rule Limited,
32 U. Miami L. Rev.
Available at: http://repository.law.miami.edu/umlr/vol32/iss2/11