It is an unfortunate reality that as the economic repercussions of the COVID-19 pandemic continue to be felt, companies even those that were performing quite strongly at the start of 2020 will face significant headwinds, if they havent already. Many may need to consider some sort of restructuring of their balance sheet and debt obligations to create a sustainable business model that positions them for success in 2021 and beyond.
Those companies that determine that restructuring is the best path forward need to understand, however, that it will not magically make all of their bills and tax obligations disappear. In fact, any time there is a foreclosure of assets, an exchange of assets for debt, or a reduction of debt, a taxable event i…
Read the full article at: https://www.cfo.com/tax/2020/08/the-hidden-tax-obligations-in-financial-restructuring/