Source: http://www.law.cornell.edu/uscode/text/26/108?qt-us_code_tabs=1
Timestamp: 2014-12-25 03:56:01
Document Index: 106805566

Matched Legal Cases: ['§ 108', '§ 108', '§ 108', '§\u2009822', '§ 5', '§ 1', '§ 1906', '§ 2', '§ 3', '§ 102', '§ 304', '§ 59', '§ 474', '§ 721', '§ 1076', '§ 104', '§ 231', '§ 405', '§ 621', '§ 805', '§ 1171', '§ 1847', '§ 1004', '§ 11325', '§ 13150', '§ 1703', '§ 225', '§ 6004', '§ 402', '§ 320', '§ 896', '§ 2', '§ 303', '§ 1231', '§ 10908', '§ 202', '§ 2', '§ 2', '§ 2', '§ 2', '§ 896', '§ 320', '§ 6004', '§ 6004', '§ 225', '§ 225', '§ 225', '§ 13150', '§ 13150', '§ 13150', '§ 13226', '§ 13226', '§ 13226', '§ 13226', '§ 13226', '§ 13226', '§ 13226', '§ 13150', '§ 13150', '§ 13150', '§ 13150', '§ 13150', '§ 13226', '§ 13226', '§ 13226', '§ 13226', '§ 11325', '§ 11325', '§ 11325', '§ 11813', '§ 1004', '§ 1004', '§ 1004', '§ 1004', '§ 1004', '§ 1004', '§ 1004', '§ 822', '§ 822', '§ 231', '§ 1171', '§ 1171', '§ 231', '§ 104', '§ 822', '§ 822', '§ 822', '§ 822', '§ 822', '§ 822', '§ 805', '§ 805', '§ 805', '§ 621', '§ 59', '§ 405', '§ 474', '§ 721', '§ 721', '§ 59', '§ 59', '§ 621', '§ 1076', '§ 102', '§ 304', '§ 1951', '§ 202', '§ 10908', '§ 1231', '§ 303', '§ 2', '§ 320', '§ 896', '§ 402', '§ 225', '§ 13150', '§ 13226', '§ 13226', '§ 11325', '§ 405', '§ 822', '§ 59', '§ 59', '§ 1076', '§ 7', '§ 2', '§ 1', '§ 1951', '§ 105']

26 U.S. Code § 108 - Income from discharge of indebtedness | LII / Legal Information Institute
U.S. Code › Title 26 › Subtitle A › Chapter 1 › Subchapter B › Part III › § 108 26 U.S. Code § 108 - Income from discharge of indebtedness
In general Gross income does not include any amount which (but for this subsection) would be includible in gross income by reason of the discharge (in whole or in part) of indebtedness of the taxpayer if—
the indebtedness discharged is qualified principal residence indebtedness which is discharged before January 1, 2014.
Coordination of exclusions (A)
Title 11 exclusion takes precedence Subparagraphs (B), (C), (D), and (E) of paragraph (1) shall not apply to a discharge which occurs in a title 11 case.
Insolvency exclusion takes precedence over qualified farm exclusion and qualified real property business exclusion Subparagraphs (C) and (D) of paragraph (1) shall not apply to a discharge to the extent the taxpayer is insolvent.
Principal residence exclusion takes precedence over insolvency exclusion unless elected otherwise Paragraph (1)(B) shall not apply to a discharge to which paragraph (1)(E) applies unless the taxpayer elects to apply paragraph (1)(B) in lieu of paragraph (1)(E).
Insolvency exclusion limited to amount of insolvency In the case of a discharge to which paragraph (1)(B) applies, the amount excluded under paragraph (1)(B) shall not exceed the amount by which the taxpayer is insolvent.
Reduction of tax attributes (1)
In general The amount excluded from gross income under subparagraph (A), (B), or (C) of subsection (a)(1) shall be applied to reduce the tax attributes of the taxpayer as provided in paragraph (2).
Tax attributes affected; order of reduction Except as provided in paragraph (5), the reduction referred to in paragraph (1) shall be made in the following tax attributes in the following order:
NOL Any net operating loss for the taxable year of the discharge, and any net operating loss carryover to such taxable year.
General business credit Any carryover to or from the taxable year of a discharge of an amount for purposes for determining the amount allowable as a credit under section 38 (relating to general business credit).
Minimum tax credit The amount of the minimum tax credit available under section 53(b) as of the beginning of the taxable year immediately following the taxable year of the discharge.
Capital loss carryovers Any net capital loss for the taxable year of the discharge, and any capital loss carryover to such taxable year under section 1212.
Basis reduction (i)
Passive activity loss and credit carryovers Any passive activity loss or credit carryover of the taxpayer under section 469
(b) from the taxable year of the discharge.
Foreign tax credit carryovers Any carryover to or from the taxable year of the discharge for purposes of determining the amount of the credit allowable under section 27.
In general Except as provided in subparagraph (B), the reductions described in paragraph (2) shall be one dollar for each dollar excluded by subsection (a).
Credit carryover reduction The reductions described in subparagraphs (B), (C), and (G) shall be 331/3 cents for each dollar excluded by subsection (a). The reduction described in subparagraph (F) in any passive activity credit carryover shall be 331/3 cents for each dollar excluded by subsection (a).
Ordering rules (A)
Reductions made after determination of tax for year The reductions described in paragraph (2) shall be made after the determination of the tax imposed by this chapter for the taxable year of the discharge.
Reductions under subparagraph (A) or (D) of paragraph (2) The reductions described in subparagraph (A) or (D) of paragraph (2) (as the case may be) shall be made first in the loss for the taxable year of the discharge and then in the carryovers to such taxable year in the order of the taxable years from which each such carryover arose.
Reductions under subparagraphs (B) and (G) of paragraph (2) The reductions described in subparagraphs (B) and (G) of paragraph (2) shall be made in the order in which carryovers are taken into account under this chapter for the taxable year of the discharge.
Election to apply reduction first against depreciable property (A)
In general The taxpayer may elect to apply any portion of the reduction referred to in paragraph (1) to the reduction under section 1017 of the basis of the depreciable property of the taxpayer.
Limitation The amount to which an election under subparagraph (A) applies shall not exceed the aggregate adjusted bases of the depreciable property held by the taxpayer as of the beginning of the taxable year following the taxable year in which the discharge occurs.
Other tax attributes not reduced Paragraph (2) shall not apply to any amount to which an election under this paragraph applies.
Treatment of discharge of qualified real property business indebtedness (1)
In general The amount excluded from gross income under subparagraph (D) of subsection (a)(1) shall be applied to reduce the basis of the depreciable real property of the taxpayer.
Cross reference For provisions making the reduction described in subparagraph (A), see section 1017.
Indebtedness in excess of value The amount excluded under subparagraph (D) of subsection (a)(1) with respect to any qualified real property business indebtedness shall not exceed the excess (if any) of—
Overall limitation The amount excluded under subparagraph (D) of subsection (a)(1) shall not exceed the aggregate adjusted bases of depreciable real property (determined after any reductions under subsections (b) and (g)) held by the taxpayer immediately before the discharge (other than depreciable real property acquired in contemplation of such discharge).
Qualified real property business indebtedness The term “qualified real property business indebtedness” means indebtedness which—
with respect to which such taxpayer makes an election to have this paragraph apply.
Qualified acquisition indebtedness For purposes of paragraph (3)(B), the term “qualified acquisition indebtedness” means, with respect to any real property described in paragraph (3)(A), indebtedness incurred or assumed to acquire, construct, reconstruct, or substantially improve such property.
Regulations The Secretary shall issue such regulations as are necessary to carry out this subsection, including regulations preventing the abuse of this subsection through cross-collateralization or other means.
Meaning of terms; special rules relating to certain provisions (1)
Indebtedness of taxpayer For purposes of this section, the term “indebtedness of the taxpayer” means any indebtedness—
Title 11 case For purposes of this section, the term “title 11 case” means a case under title 11 of the United States Code (relating to bankruptcy), but only if the taxpayer is under the jurisdiction of the court in such case and the discharge of indebtedness is granted by the court or is pursuant to a plan approved by the court.
Insolvent For purposes of this section, the term “insolvent” means the excess of liabilities over the fair market value of assets. With respect to any discharge, whether or not the taxpayer is insolvent, and the amount by which the taxpayer is insolvent, shall be determined on the basis of the taxpayer’s assets and liabilities immediately before the discharge.
Repealed. Pub. L. 99–514, title VIII, § 822(b)(3)(A),Oct. 22, 1986, 100 Stat. 2373] (5)
Depreciable property The term “depreciable property” has the same meaning as when used in section 1017.
Certain provisions to be applied at partner level In the case of a partnership, subsections (a), (b), (c), and (g) shall be applied at the partner level.
Special rules for S corporation (A)
Certain provisions to be applied at corporate level In the case of an S corporation, subsections (a), (b), (c), and (g) shall be applied at the corporate level, including by not taking into account under section 1366
(a) any amount excluded under subsection (a) of this section.
Reduction in carryover of disallowed losses and deductions In the case of an S corporation, for purposes of subparagraph (A) of subsection (b)(2), any loss or deduction which is disallowed for the taxable year of the discharge under section 1366
(d)(1) shall be treated as a net operating loss for such taxable year. The preceding sentence shall not apply to any discharge to the extent that subsection (a)(1)(D) applies to such discharge.
Coordination with basis adjustments under section 1367(b)(2) For purposes of subsection (e)(6), a shareholder’s adjusted basis in indebtedness of an S corporation shall be determined without regard to any adjustments made under section 1367
Reductions of tax attributes in title 11 cases of individuals to be made by estate In any case under chapter 7 or 11 of title 11 of the United States Code to which section 1398 applies, for purposes of paragraphs (1) and (5) of subsection (b) the estate (and not the individual) shall be treated as the taxpayer. The preceding sentence shall not apply for purposes of applying section 1017 to property transferred by the estate to the individual.
Time for making election, etc. (A)
Time An election under paragraph (5) of subsection (b) or under paragraph (3)(C) of subsection (c) shall be made on the taxpayer’s return for the taxable year in which the discharge occurs or at such other time as may be permitted in regulations prescribed by the Secretary.
Revocation only with consent An election referred to in subparagraph (A), once made, may be revoked only with the consent of the Secretary.
Manner An election referred to in subparagraph (A) shall be made in such manner as the Secretary may by regulations prescribe.
Cross reference For provision that no reduction is to be made in the basis of exempt property of an individual debtor, see section 1017
General rules for discharge of indebtedness (including discharges not in title 11 cases or insolvency) For purposes of this title—
No other insolvency exception Except as otherwise provided in this section, there shall be no insolvency exception from the general rule that gross income includes income from the discharge of indebtedness.
Income not realized to extent of lost deductions No income shall be realized from the discharge of indebtedness to the extent that payment of the liability would have given rise to a deduction.
Adjustments for unamortized premium and discount The amount taken into account with respect to any discharge shall be properly adjusted for unamortized premium and unamortized discount with respect to the indebtedness discharged.
Acquisition of indebtedness by person related to debtor (A)
Treated as acquisition by debtor For purposes of determining income of the debtor from discharge of indebtedness, to the extent provided in regulations prescribed by the Secretary, the acquisition of outstanding indebtedness by a person bearing a relationship to the debtor specified in section 267
(b)(1) from a person who does not bear such a relationship to the debtor shall be treated as the acquisition of such indebtedness by the debtor. Such regulations shall provide for such adjustments in the treatment of any subsequent transactions involving the indebtedness as may be appropriate by reason of the application of the preceding sentence.
Members of family For purposes of this paragraph, sections 267
(b) and 707
(b)(1) shall be applied as if section 267
(c)(4) provided that the family of an individual consists of the individual’s spouse, the individual’s children, grandchildren, and parents, and any spouse of the individual’s children or grandchildren.
Entities under common control treated as related For purposes of this paragraph, two entities which are treated as a single employer under subsection (b) or (c) ofsection 414 shall be treated as bearing a relationship to each other which is described in section 267
Purchase-money debt reduction for solvent debtor treated as price reduction If—
Indebtedness contributed to capital Except as provided in regulations, for purposes of determining income of the debtor from discharge of indebtedness, if a debtor corporation acquires its indebtedness from a shareholder as a contribution to capital—
such corporation shall be treated as having satisfied the indebtedness with an amount of money equal to the shareholder’s adjusted basis in the indebtedness.
Recapture of gain on subsequent sale of stock (A)
In general If a creditor acquires stock of a debtor corporation in satisfaction of such corporation’s indebtedness, for purposes of section 1245—
as deductions under subsection (a) or (b) ofsection 166 (by reason of the worthlessness or partial worthlessness of the indebtedness), or
as an ordinary loss on the exchange,
an exchange of such stock qualifying under section 354
(a) shall be treated as an exchange to which section 1245
(b)(3) applies.
The amount determined under clause (ii) shall be reduced by the amount (if any) included in the creditor’s gross income on the exchange.
Special rule for cash basis taxpayers In the case of any creditor who computes his taxable income under the cash receipts and disbursements method, proper adjustment shall be made in the amount taken into account under clause (ii) of subparagraph (A) for any amount which was not included in the creditor’s gross income but which would have been included in such gross income if such indebtedness had been satisfied in full.
Stock of parent corporation For purposes of this paragraph, stock of a corporation in control (within the meaning of section 368(c)) of the debtor corporation shall be treated as stock of the debtor corporation.
Treatment of successor corporation For purposes of this paragraph, the term “debtor corporation” includes a successor corporation.
Partnership rule Under regulations prescribed by the Secretary, rules similar to the rules of the foregoing subparagraphs of this paragraph shall apply with respect to the indebtedness of a partnership.
Indebtedness satisfied by corporate stock or partnership interest For purposes of determining income of a debtor from discharge of indebtedness, if—
Discharge of indebtedness income not taken into account in determining whether entity meets REIT qualifications Any amount included in gross income by reason of the discharge of indebtedness shall not be taken into account for purposes of paragraphs (2) and (3) of section 856
Indebtedness satisfied by issuance of debt instrument (A)
In general For purposes of determining income of a debtor from discharge of indebtedness, if a debtor issues a debt instrument in satisfaction of indebtedness, such debtor shall be treated as having satisfied the indebtedness with an amount of money equal to the issue price of such debt instrument.
Issue price For purposes of subparagraph (A), the issue price of any debt instrument shall be determined under sections 1273 and 1274. For purposes of the preceding sentence, section 1273
(b)(4) shall be applied by reducing the stated redemption price of any instrument by the portion of such stated redemption price which is treated as interest for purposes of this chapter.
In general In the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income by reason of the discharge (in whole or in part) of any student loan if such discharge was pursuant to a provision of such loan under which all or part of the indebtedness of the individual would be discharged if the individual worked for a certain period of time in certain professions for any of a broad class of employers.
Student loan For purposes of this subsection, the term “student loan” means any loan to an individual to assist the individual in attending an educational organization described in section 170
(b)(1)(A)(ii) made by—
which is exempt from taxation under section 501
any educational organization described in section 170
(b)(1)(A)(ii) if such loan is made—
pursuant to a program of such educational organization which is designed to encourage its students to serve in occupations with unmet needs or in areas with unmet needs and under which the services provided by the students (or former students) are for or under the direction of a governmental unit or an organization described in section 501
The term “student loan” includes any loan made by an educational organization described in section 170
(b)(1)(A)(ii) or by an organization exempt from tax under section 501
(a) to refinance a loan to an individual to assist the individual in attending any such educational organization but only if the refinancing loan is pursuant to a program of the refinancing organization which is designed as described in subparagraph (D)(ii).
Exception for discharges on account of services performed for certain lenders Paragraph (1) shall not apply to the discharge of a loan made by an organization described in paragraph (2)(D) if the discharge is on account of services performed for either such organization.
Payments under national health service corps loan repayment program and certain state loan repayment programs In the case of an individual, gross income shall not include any amount received under section 338B(g) of the Public Health Service Act, under a State program described in section 338I of such Act, or under any other State loan repayment or loan forgiveness program that is intended to provide for the increased availability of health care services in underserved or health professional shortage areas (as determined by such State).
Special rules for discharge of qualified farm indebtedness (1)
Discharge must be by qualified person (A)
In general Subparagraph (C) of subsection (a)(1) shall apply only if the discharge is by a qualified person.
Qualified person For purposes of subparagraph (A), the term “qualified person” has the meaning given to such term by section 49
(a)(1)(D)(iv); except that such term shall include any Federal, State, or local government or agency or instrumentality thereof.
Qualified farm indebtedness For purposes of this section, indebtedness of a taxpayer shall be treated as qualified farm indebtedness if—
Amount excluded cannot exceed sum of tax attributes and business and investment assets (A)
In general The amount excluded under subparagraph (C) of subsection (a)(1) shall not exceed the sum of—
Adjusted tax attributes For purposes of subparagraph (A), the term “adjusted tax attributes” means the sum of the tax attributes described in subparagraphs (A), (B), (C), (D), (F), and (G) of subsection (b)(2) determined by taking into account $3 for each $1 of the attributes described in subparagraphs (B), (C), and (G) of subsection (b)(2) and the attribute described in subparagraph (F) of subsection (b)(2) to the extent attributable to any passive activity credit carryover.
Qualified property For purposes of this paragraph, the term “qualified property” means any property which is used or is held for use in a trade or business or for the production of income.
Coordination with insolvency exclusion For purposes of this paragraph, the adjusted basis of any qualified property and the amount of the adjusted tax attributes shall be determined after any reduction under subsection (b) by reason of amounts excluded from gross income under subsection (a)(1)(B).
Special rules relating to qualified principal residence indebtedness (1)
Basis reduction The amount excluded from gross income by reason of subsection (a)(1)(E) shall be applied to reduce (but not below zero) the basis of the principal residence of the taxpayer.
Qualified principal residence indebtedness For purposes of this section, the term “qualified principal residence indebtedness” means acquisition indebtedness (within the meaning of section 163
(h)(3)(B), applied by substituting “$2,000,000 ($1,000,000” for “$1,000,000 ($500,000” in clause (ii) thereof) with respect to the principal residence of the taxpayer.
Exception for certain discharges not related to taxpayer’s financial condition Subsection (a)(1)(E) shall not apply to the discharge of a loan if the discharge is on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer.
Ordering rule If any loan is discharged, in whole or in part, and only a portion of such loan is qualified principal residence indebtedness, subsection (a)(1)(E) shall apply only to so much of the amount discharged as exceeds the amount of the loan (as determined immediately before such discharge) which is not qualified principal residence indebtedness.
Principal residence For purposes of this subsection, the term “principal residence” has the same meaning as when used in section 121.
Deferral and ratable inclusion of income arising from business indebtedness discharged by the reacquisition of a debt instrument (1)
In general At the election of the taxpayer, income from the discharge of indebtedness in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument shall be includible in gross income ratably over the 5-taxable-year period beginning with—
Deferral of deduction for original issue discount in debt for debt exchanges (A)
In general If, as part of a reacquisition to which paragraph (1) applies, any debt instrument is issued for the applicable debt instrument being reacquired (or is treated as so issued under subsection (e)(4) and the regulations thereunder) and there is any original issue discount determined under subpart A of part V of subchapter P of this chapter with respect to the debt instrument so issued—
Deemed debt for debt exchanges For purposes of subparagraph (A), if any debt instrument is issued by an issuer and the proceeds of such debt instrument are used directly or indirectly by the issuer to reacquire an applicable debt instrument of the issuer, the debt instrument so issued shall be treated as issued for the debt instrument being reacquired. If only a portion of the proceeds from a debt instrument are so used, the rules of subparagraph (A) shall apply to the portion of any original issue discount on the newly issued debt instrument which is equal to the portion of the proceeds from such instrument used to reacquire the outstanding instrument.
Applicable debt instrument For purposes of this subsection—
Applicable debt instrument The term “applicable debt instrument” means any debt instrument which was issued by—
Debt instrument The term “debt instrument” means a bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness (within the meaning of section 1275
Reacquisition For purposes of this subsection—
In general The term “reacquisition” means, with respect to any applicable debt instrument, any acquisition of the debt instrument by—
Acquisition The term “acquisition” shall, with respect to any applicable debt instrument, include an acquisition of the debt instrument for cash, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, and the contribution of the debt instrument to capital. Such term shall also include the complete forgiveness of the indebtedness by the holder of the debt instrument.
Related person The determination of whether a person is related to another person shall be made in the same manner as under subsection (e)(4).
Coordination with other exclusions If a taxpayer elects to have this subsection apply to an applicable debt instrument, subparagraphs (A), (B), (C), and (D) of subsection (a)(1) shall not apply to the income from the discharge of such indebtedness for the taxable year of the election or any subsequent taxable year.
Acceleration of deferred items (i)
Special rule for partnerships In the case of a partnership, any income deferred under this subsection shall be allocated to the partners in the partnership immediately before the discharge in the manner such amounts would have been included in the distributive shares of such partners under section 704 if such income were recognized at such time. Any decrease in a partner’s share of partnership liabilities as a result of such discharge shall not be taken into account for purposes of section 752 at the time of the discharge to the extent it would cause the partner to recognize gain under section 731. Any decrease in partnership liabilities deferred under the preceding sentence shall be taken into account by such partner at the same time, and to the extent remaining in the same amount, as income deferred under this subsection is recognized.
Secretarial authority The Secretary may prescribe such regulations, rules, or other guidance as may be necessary or appropriate for purposes of applying this subsection, including—
(Aug. 16, 1954, ch. 736, 68A Stat. 32; June 29, 1956, ch. 463, § 5,70 Stat. 403; Pub. L. 88–496, § 1(a),June 8, 1960, 74 Stat. 164; Pub. L. 94–455, title XIX, §§ 1906(b)(13)(A), 1951(b)(2)(A),Oct. 4, 1976, 90 Stat. 1834, 1836; Pub. L. 96–589, § 2(a),Dec. 24, 1980, 94 Stat. 3389; Pub. L. 97–354, § 3(e),Oct. 19, 1982, 96 Stat. 1689; Pub. L. 97–448, title I, § 102(h)(1), title III, § 304(d),Jan. 12, 1983, 96 Stat. 2372, 2398; Pub. L. 98–369, div. A, title I, § 59(a), (b)(1), title IV, § 474(r)(5), title VII, § 721(b)(2), title X, § 1076(a),July 18, 1984, 98 Stat. 576, 839, 966, 1053; Pub. L. 99–514, title I, § 104(b)(2), title II, § 231(d)(3)(D), title IV, § 405(a), title VI, § 621(e)(1), title VIII, §§ 805(c)(2)–(4), 822(a), (b)(1)–(3), title XI, § 1171(b)(4), title XVIII, § 1847(b)(7),Oct. 22, 1986, 100 Stat. 2105, 2179, 2224, 2266, 2362, 2373, 2513, 2856; Pub. L. 100–647, title I, § 1004(a)(1)–(4), (6), Nov. 10, 1988, 102 Stat. 3385, 3387; Pub. L. 101–508, title XI, §§ 11325(a)(1), (b), 11813(b)(6),Nov. 5, 1990, 104 Stat. 1388–466, 1388–551; Pub. L. 103–66, title XIII, §§ 13150(a)–(c)(5), 13226(a)(1), (2)(B), (b)(1)–(3), Aug. 10, 1993, 107 Stat. 446–448, 487, 488; Pub. L. 104–188, title I, § 1703(n)(2),Aug. 20, 1996, 110 Stat. 1877; Pub. L. 105–34, title II, § 225(a),Aug. 5, 1997, 111 Stat. 820; Pub. L. 105–206, title VI, § 6004(f),July 22, 1998, 112 Stat. 795; Pub. L. 107–147, title IV, § 402(a),Mar. 9, 2002, 116 Stat. 40; Pub. L. 108–357, title III, § 320(a), title VIII, § 896(a),Oct. 22, 2004, 118 Stat. 1473, 1648; Pub. L. 110–142, § 2(a)–(c), Dec. 20, 2007, 121 Stat. 1803, 1804; Pub. L. 110–343, div. A, title III, § 303(a),Oct. 3, 2008, 122 Stat. 3807; Pub. L. 111–5, div. B, title I, § 1231(a),Feb. 17, 2009, 123 Stat. 338; Pub. L. 111–148, title X, § 10908(a),Mar. 23, 2010, 124 Stat. 1021; Pub. L. 112–240, title II, § 202(a),Jan. 2, 2013, 126 Stat. 2323.)
Sections 338B(g) and 338I of the Public Health Service Act, referred to in subsec. (f)(4), are classified to sections 254l–1
(g) and 254q–1, respectively, of Title 42, The Public Health and Welfare.
2013—Subsec. (a)(1)(E). Pub. L. 112–240substituted “January 1, 2014” for “January 1, 2013”.
2010—Subsec. (f)(4). Pub. L. 111–148amended par. (4) generally. Prior to amendment, text read as follows: “In the case of an individual, gross income shall not include any amount received under section 338B(g) of the Public Health Service Act or under a State program described in section 338I of such Act.”
2009—Subsec. (i). Pub. L. 111–5added subsec. (i).
2008—Subsec. (a)(1)(E). Pub. L. 110–343substituted “January 1, 2013” for “January 1, 2010”.
2007—Subsec. (a)(1)(E). Pub. L. 110–142, § 2(a), added subpar. (E).
Subsec. (a)(2)(A). Pub. L. 110–142, § 2(c)(1), substituted “(D), and (E)” for “and (D)”.
Subsec. (a)(2)(C). Pub. L. 110–142, § 2(c)(2), added subpar. (C).
Subsec. (h). Pub. L. 110–142, § 2(b), added subsec. (h).
2004—Subsec. (e)(8). Pub. L. 108–357, § 896(a), amended heading and text of par. (8) generally. Prior to amendment, text read as follows: “For purposes of determining income of a debtor from discharge of indebtedness, if a debtor corporation transfers stock to a creditor in satisfaction of its indebtedness, such corporation shall be treated as having satisfied the indebtedness with an amount of money equal to the fair market value of the stock.”
Subsec. (f)(4). Pub. L. 108–357, § 320(a), added par. (4).
2002—Subsec. (d)(7)(A). Pub. L. 107–147inserted “, including by not taking into account under section 1366
(a) any amount excluded under subsection (a) of this section” before period at end.
1998—Subsec. (f)(2). Pub. L. 105–206, § 6004(f)(1), amended concluding provisions generally. Prior to amendment, concluding provisions read as follows: “The term ‘student loan’ includes any loan made by an educational organization so described or by an organization exempt from tax under section 501
(a) to refinance a loan meeting the requirements of the preceding sentence.”
Subsec. (f)(3). Pub. L. 105–206, § 6004(f)(2), struck out “(or by an organization described in paragraph (2)(E) from funds provided by an organization described in paragraph (2)(D))” after “paragraph (2)(D)”.
1997—Subsec. (f)(2). Pub. L. 105–34, § 225(a)(1), added subpar. (D) and concluding provisions and struck out former subpar. (D) which read as follows: “any educational organization so described pursuant to an agreement with any entity described in subparagraph (A), (B), or (C) under which the funds from which the loan was made were provided to such educational organization.”
Subsec. (f)(2)(B). Pub. L. 105–34, § 225(a)(1), struck out “or” at end.
Subsec. (f)(3). Pub. L. 105–34, § 225(a)(2), added par. (3).
1996—Subsec. (d)(9)(A). Pub. L. 104–188substituted “paragraph (3)(C)” for “paragraph (3)(B)”.
1993—Subsec. (a)(1)(D). Pub. L. 103–66, § 13150(a), added subpar. (D).
Subsec. (a)(2)(A). Pub. L. 103–66, § 13150(c)(1), substituted “, (C), and (D)” for “and (C)”.
Subsec. (a)(2)(B). Pub. L. 103–66, § 13150(c)(2), amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “Subparagraph (C) of paragraph (1) shall not apply to a discharge to the extent the taxpayer is insolvent.”
Subsec. (b)(2)(C) to (E). Pub. L. 103–66, § 13226(b)(1), added subpar. (C) and redesignated former subpars. (C) and (D) as (D) and (E), respectively. Former subpar. (E) redesignated (F).
Subsec. (b)(2)(F). Pub. L. 103–66, § 13226(b)(2), added subpar. (F). Former subpar. (F) redesignated (G).
Pub. L. 103–66, § 13226(b)(1), redesignated subpar. (E) as (F).
Subsec. (b)(2)(G). Pub. L. 103–66, § 13226(b)(2), redesignated subpar. (F) as (G).
Subsec. (b)(3)(B). Pub. L. 103–66, § 13226(b)(3)(A), amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “The reductions described in subparagraphs (B) and (E) of paragraph (2) shall be 331/3 cents for each dollar excluded by subsection (a).”
Subsec. (b)(4)(B). Pub. L. 103–66, § 13226(b)(3)(B), substituted “(D)” for “(C)” in heading and text.
Subsec. (b)(4)(C). Pub. L. 103–66, § 13226(b)(3)(C), substituted “(G)” for “(E)” in heading and text.
Subsec. (c). Pub. L. 103–66, § 13150(b), added subsec. (c).
Subsec. (d). Pub. L. 103–66, § 13150(c)(3)(B), substituted “certain provisions” for “subsections (a), (b) and (g)” in heading.
Subsec. (d)(6), (7)(A). Pub. L. 103–66, § 13150(c)(3)(A), (C), substituted “Certain provisions” for “Subsections (a), (b) and (g)” in heading and “subsections (a), (b), (c), and (g)” for “subsections (a), (b), and (g)” in text.
Subsec. (d)(7)(B). Pub. L. 103–66, § 13150(c)(4), inserted at end “The preceding sentence shall not apply to any discharge to the extent that subsection (a)(1)(D) applies to such discharge.”
Subsec. (d)(9)(A). Pub. L. 103–66, § 13150(c)(5), inserted “or under paragraph (3)(B) of subsection (c)” after “subsection (b)”.
Subsec. (e)(6). Pub. L. 103–66, § 13226(a)(2)(B), substituted “Except as provided in regulations, for” for “For”.
Subsec. (e)(8). Pub. L. 103–66, § 13226(a)(1)(B), amended heading and text of par. (8) generally. Prior to amendment, text read as follows: “For purposes of determining income of the debtor from discharge of indebtedness, the stock for debt exception shall not apply—
Subsec. (e)(10), (11). Pub. L. 103–66, § 13226(a)(1)(A), redesignated par. (11) as (10) and struck out former par. (10) which related to satisfaction of indebtedness by transfer of corporation’s stock.
Subsec. (g)(3)(B). Pub. L. 103–66, § 13226(b)(3)(D), substituted “subparagraphs (A), (B), (C), (D), (F), and (G)” for “subparagraphs (A), (B), (C), and (E)” and “subparagraphs (B), (C), and (G)” for “subparagraphs (B) and (E)” and inserted before period at end “and the attribute described in subparagraph (F) of subsection (b)(2) to the extent attributable to any passive activity credit carryover”.
1990—Subsec. (e)(8). Pub. L. 101–508, § 11325(b)(2), inserted provision at end that any stock which is a disqualified stock, as so defined, not be treated as stock for purposes of this paragraph.
Subsec. (e)(10)(B). Pub. L. 101–508, § 11325(b)(1), substituted heading for one which read: “Exception for title 11 cases and insolvent debtors” and amended text generally. Prior to amendment, text read as follows: “Subparagraph (A) shall not apply in the case of a debtor in a title 11 case or to the extent the debtor is insolvent.”
Subsec. (e)(11). Pub. L. 101–508, § 11325(a)(1), added par. (11).
Subsec. (g)(1)(B). Pub. L. 101–508, § 11813(b)(6), substituted “section 49
(a)(1)(D)(iv)” for “section 46
(c)(8)(D)(iv)”.
1988—Subsec. (a)(1)(C). Pub. L. 100–647, § 1004(a)(1), added subpar. (C).
Subsec. (a)(2). Pub. L. 100–647, § 1004(a)(2), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Subparagraph (B) of paragraph (1) shall not apply to a discharge which occurs in a title 11 case.”
Subsec. (b). Pub. L. 100–647, § 1004(a)(3), struck out “in title 11 case or insolvency” after “Reduction of tax attributes” in heading and substituted “subparagraph (A), (B), or (C)” for “subparagraph (A) or (B)” in text of par. (1).
Subsec. (d). Pub. L. 100–647, § 1004(a)(6)(B), which directed amendment of subsec. (d) heading by substituting “subsections (a), (b), and (g)” for “subsections (a), and (b)”, was executed by making the substitution for “subsections (a) and (b)” as the probable intent of Congress.
Subsec. (d)(6). Pub. L. 100–647, § 1004(a)(6)(A), (C), substituted “Subsections (a), (b), and (g)” for “Subsections (a) and (b)” in heading and “subsections (a), (b), and (g)” for “subsections (a) and (b)” in text.
Subsec. (d)(7)(A). Pub. L. 100–647, § 1004(a)(6)(A), (C), substituted “Subsections (a), (b), and (g)” for “Subsections (a) and (b)” in heading and “subsections (a), (b), and (g)” for “subsections (a) and (b)” in text.
Subsec. (g). Pub. L. 100–647, § 1004(a)(4), substituted “indebtedness” for “indebtedness of solvent farmers” in heading and amended text generally. Prior to amendment, text read as follows:
“(3) Qualified person.—For purposes of this subsection, the term ‘qualified person’ means a person described in section 46
(c)(8)(D)(iv).”
1986—Subsec. (a)(1)(C). Pub. L. 99–514, § 822(a), struck out subpar. (C) relating to exclusion from gross income if the indebtedness discharged is qualified business indebtedness.
Subsec. (a)(2). Pub. L. 99–514, § 822(b)(1), substituted “Subparagraph (B) of paragraph (1)” for “Subparagraphs (B) and (C) of paragraph (1)” in subpar. (A), struck out subpar. (A) designation and heading, and struck out subpar. (B) providing that insolvency exclusion takes precedence over qualified business exclusion.
Subsec. (b)(2)(B). Pub. L. 99–514, § 231(d)(3)(D), substituted “General business credit” for “Research credit and general business credit” in heading and amended text, as amended by this Act (Pub. L. 99–514, § 1171(b)(4) (see below)), generally. Prior to amendment, text read as follows: “Any carryover to or from the taxable year of a discharge of an amount for purposes of determining the amount allowable as a credit under—
Pub. L. 99–514, § 1171(b)(4), struck out last sentence which had been eliminated by the general amendment of subpar. (B) by Pub. L. 99–514, § 231(d)(3)(D). See above.
Subsec. (b)(3). Pub. L. 99–514, § 104(b)(2), substituted “331/3 cents” for “50 cents”.
Subsec. (c). Pub. L. 99–514, § 822(b)(2), struck out subsec. (c) relating to tax treatment of discharge of qualified business indebtedness.
Subsec. (d). Pub. L. 99–514, § 822(b)(3)(B), struck out reference to subsec. (c) in heading.
Subsec. (d)(4). Pub. L. 99–514, § 822(b)(3)(A), struck out par. (4) relating to treatment of indebtedness as qualified business indebtedness.
Subsec. (d)(6), (7)(A). Pub. L. 99–514, § 822(b)(3)(B), struck out reference to subsec. (c) in heading and text.
Subsec. (d)(7)(B). Pub. L. 99–514, § 822(b)(3)(C), struck out “The preceding sentence shall not apply to any discharge to the extent that subsection (a)(1)(C) applies to such discharge.”
Subsec. (d)(9)(A). Pub. L. 99–514, § 822(b)(3)(D), struck out “under paragraph (4) of this subsection or” after “An election”.
Subsec. (e)(7)(A)(ii)(I). Pub. L. 99–514, § 805(c)(2), substituted “subsection (a) or (b) ofsection 166” for “subsection (a), (b), or (c) ofsection 166”.
Subsec. (e)(7)(B) to (D). Pub. L. 99–514, § 805(c)(3), redesignated subpars. (C) to (E) as (B) to (D), respectively, and struck out former subpar. (B) which related to taxpayers on reserve method.
Subsec. (e)(7)(E), (F). Pub. L. 99–514, § 805(c)(3), (4), redesignated subpar. (F) as (E) and substituted “the foregoing subparagraphs” for “subparagraphs (A), (B), (C), (D), and (E)”. Former subpar. (E) redesignated (D).
Subsec. (e)(10)(C). Pub. L. 99–514, § 621(e), repealed the amendment by Pub. L. 98–369, § 59(b)(1), which had added subpar. (C) creating an exception for transfers in certain workouts of the satisfaction of indebtedness by corporation’s stock. See 1984 Amendment note below.
Subsec. (g). Pub. L. 99–514, § 405(a), added subsec. (g).
1984—Subsec. (b)(2)(B). Pub. L. 98–369, § 474(r)(5), substituted provisions relating to research credits and general business credits covering carryovers to or from the taxable year of a discharge of an amount for purposes of determining the amount allowable as a credit under section 30 (relating to credit for increasing research activities), or section 38 (relating to general business credit), and directing that there shall not be taken into account any portion of a carryover which is attributable to the employee stock ownership credit determined under section 41 for former provisions covering carryovers to or from the taxable year of the discharge of an amount for purposes of determining the amount of a credit allowable under section 38 (relating to investment in certain depreciable property), section 40 (relating to expenses of work incentive programs), section 44B (relating to credit for employment of certain new employees), section 44E (relating to alcohol used as a fuel), or section 44F (relating to credit for increasing research activities), and directing that, for purposes of clause (i), there could not be taken into account any portion of a carryover which was attributable to the employee plan credit (within the meaning of section 48
(o)(3)).
Subsec. (d)(6). Pub. L. 98–369, § 721(b)(2), struck out “or S corporation shareholder level” in heading and second sentence which provided that “In the case of an S corporation, subsections (a), (b), and (c) shall apply at the shareholder level.”. See par. (7)(A).
Subsec. (d)(7) to (10). Pub. L. 98–369, § 721(b)(2), added par. (7) and redesignated former pars. (7) to (9) as (8) to (10), respectively.
Subsec. (e)(10). Pub. L. 98–369, § 59(a), added par. (10).
Subsec. (e)(10)(C). Pub. L. 98–369, § 59(b)(1), which added subpar. (C), effective as if included in the amendments made by section 806(e) and (f) ofPub. L. 94–455, was repealed by Pub. L. 99–514, § 621(e), (f)(2), eff. Jan. 1, 1986, with certain exceptions, see Effective Date of 1986 Amendment note below.
Subsec. (f). Pub. L. 98–369, § 1076(a), added subsec. (f).
1983—Subsec. (b)(2)(B)(v). Pub. L. 97–448, § 102(h)(1), added cl. (v).
Subsec. (e)(7)(A)(iii). Pub. L. 97–448, § 304(d), added cl. (iii).
1982—Subsec. (d)(6). Pub. L. 97–354inserted “or S corporation shareholder level” in heading and inserted “In the case of an S corporation, subsections (a), (b), and (c) shall be applied at the shareholder level.”
1980—Pub. L. 96–589completely revised and expanded provisions by specifying the types of indebtedness and by setting out priorities among the exclusions, to reflect the revision of Title 11, Bankruptcy, in 1978.
1976—Pub. L. 94–455, § 1951(b)(2)(A), struck out “(a) Special rule of exclusion.—” after “Income from discharge of indebtedness” and struck out subsec. (b) which related to discharge, cancellation, or modification of indebtedness of certain railroad corporations.
1960—Subsec. (b). Pub. L. 86–496provided that if the discharge, cancellation, or modification of any indebtedness is effected pursuant to a court order in a receivership proceeding or in a proceeding under section 77 of the Bankruptcy Act, commenced before Jan. 1, 1960, then no amount is to be included in gross income with respect to it, and struck out provisions which made subsection inapplicable to discharges occurring in a taxable year beginning after Dec. 31, 1957.
Pub. L. 112–240, title II, § 202(b),Jan. 2, 2013, 126 Stat. 2323, provided that: “The amendment made by this section [amending this section] shall apply to indebtedness discharged after December 31, 2012.”
Pub. L. 111–148, title X, § 10908(b),Mar. 23, 2010, 124 Stat. 1021, provided that: “The amendment made by this section [amending this section] shall apply to amounts received by an individual in taxable years beginning after December 31, 2008.”
Pub. L. 111–5, div. B, title I, § 1231(b),Feb. 17, 2009, 123 Stat. 341, provided that: “The amendments made by this section [amending this section] shall apply to discharges in taxable years ending after December 31, 2008.”
Pub. L. 110–343, div. A, title III, § 303(b),Oct. 3, 2008, 122 Stat. 3807, provided that: “The amendment made by this section [amending this section] shall apply to discharges of indebtedness occurring on or after January 1, 2010.”
Pub. L. 110–142, § 2(d),Dec. 20, 2007, 121 Stat. 1804, provided that: “The amendments made by this section [amending this section] shall apply to discharges of indebtedness on or after January 1, 2007.”
Pub. L. 108–357, title III, § 320(c),Oct. 22, 2004, 118 Stat. 1473, provided that: “The amendments made by this section [amending this section, sections 3121, 3231, 3306, and 3401 of this title, and section 409 of Title 42, The Public Health and Welfare] shall apply to amounts received by an individual in taxable years beginning after December 31, 2003.”
Pub. L. 108–357, title VIII, § 896(b),Oct. 22, 2004, 118 Stat. 1649, provided that: “The amendment made by this section [amending this section] shall apply with respect to cancellations of indebtedness occurring on or after the date of the enactment of this Act [Oct. 22, 2004].”
Pub. L. 107–147, title IV, § 402(b),Mar. 9, 2002, 116 Stat. 40, provided that:
Pub. L. 105–34, title II, § 225(b),Aug. 5, 1997, 111 Stat. 820, provided that: “The amendments made by this section [amending this section] shall apply to discharges of indebtedness after the date of the enactment of this Act [Aug. 5, 1997].”
Pub. L. 103–66, title XIII, § 13150(d),Aug. 10, 1993, 107 Stat. 448, provided that: “The amendments made by this section [amending this section and sections 703 and 1017 of this title] shall apply to discharges after December 31, 1992, in taxable years ending after such date.”
Pub. L. 103–66, title XIII, § 13226(a)(3),Aug. 10, 1993, 107 Stat. 487, provided that:
Pub. L. 103–66, title XIII, § 13226(b)(4),Aug. 10, 1993, 107 Stat. 488, provided that: “The amendments made by this subsection [amending this section] shall apply to discharges of indebtedness in taxable years beginning after December 31, 1993.”
Pub. L. 101–508, title XI, § 11325(c),Nov. 5, 1990, 104 Stat. 1388–466, provided that:
Amendment by section 11813(b)(6) ofPub. L. 101–508applicable to property placed in service after Dec. 31, 1990, but not applicable to any transition property (as defined in section 49
Amendment by section 104(b)(2) ofPub. L. 99–514applicable to taxable years beginning after Dec. 31, 1986, see section 151(a) ofPub. L. 99–514, set out as a note under section 1 of this title.
Amendment by section 231(d)(3)(D) ofPub. L. 99–514applicable to taxable years beginning after Dec. 31, 1985, see section 231(g) ofPub. L. 99–514, set out as a note under section 41 of this title.
Pub. L. 99–514, title IV, § 405(c),Oct. 22, 1986, 100 Stat. 2224, provided that: “The amendments made by this section [amending this section and section 1017 of this title] shall apply to discharges of indebtedness occurring after April 9, 1986, in taxable years ending after such date.”
Repeal by section 621(e)(1) ofPub. L. 99–514of amendment by section 59(b)(1) ofPub. L. 99–369, which was effective as if included in the amendments made by section 806(e) and (f) ofPub. L. 94–455, effective Jan. 1, 1986, with certain exceptions, see section 621(f)(2) ofPub. L. 99–514, set out as a note under section 382 of this title.
Amendment by section 805(c)(2), (4) ofPub. L. 99–514applicable to taxable years beginning after Dec. 31, 1986, with certain changes required in method of accounting, see section 805(d) ofPub. L. 99–514, set out as a note under section 166 of this title.
Pub. L. 99–514, title VIII, § 822(c),Oct. 22, 1986, 100 Stat. 2373, provided that: “The amendments made by this section [amending this section and section 1017 of this title] shall apply to discharges after December 31, 1986.”
Amendment by section 1171(b)(4) ofPub. L. 99–514applicable to compensation paid or accrued after Dec. 31, 1986, in taxable years ending after such date, except as otherwise provided, see section 1171(c) ofPub. L. 99–514, set out as a note under section 38 of this title.
Amendment by section 1847(b)(7) ofPub. L. 99–514effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 ofPub. L. 99–514, set out as a note under section 48 of this title.
Pub. L. 98–369, div. A, title I, § 59(b)(2),July 18, 1984, 98 Stat. 577, provided that: “The amendment made by paragraph (1) [amending this section] shall take effect as if it had been included in the amendments made by subsections (e) and (f) ofsection 806 of the Tax Reform Act of 1976 [Pub. L. 94–455].” See Effective Date of 1976 Amendment note set out under section 382 of this title.
Pub. L. 98–369, div. A, title I, § 59(b)[(c)], July 18, 1984, 98 Stat. 577, provided that:
Amendment by section 474(r)(5) ofPub. L. 98–369applicable to taxable years beginning after Dec. 31, 1983, and to carrybacks from such years, see section 475(a) ofPub. L. 98–369, set out as a note under section 21 of this title.
Amendment by section 721(b) ofPub. L. 98–369applicable to contributions to capital after Dec. 31, 1980, in taxable years ending after such date, see section 721(y)(2) ofPub. L. 98–369, set out as a note under section 1361 of this title.
Pub. L. 98–369, div. A, title X, § 1076(b),July 18, 1984, 98 Stat. 1054, provided that: “The amendments made by this section [amending this section] shall apply to discharges of indebtedness made on or after January 1, 1983.”
Pub. L. 96–589, § 7,Dec. 24, 1980, 94 Stat. 3411, as amended by Pub. L. 99–514, § 2,Oct. 22, 1986, 100 Stat. 2095, provided that:
“(2) Exchanges of property for accrued interest.—The amendments made by subsection (e) ofsection 4 [amending sections 354 and 355 of this title] (relating to treatment of property attributable to accrued interest) shall also apply to any exchange—
“(1) For subsection (a) (relating to exemption from personal holding company tax).—The amendments made by subsection (a) ofsection 5 [amending section 542 of this title] shall apply to any bankruptcy case or similar judicial proceeding commenced after December 31, 1980.
“(2) For subsection (b) (relating to repeal of special treatment for certain railroad redemptions).—The amendments made by subsection (b) ofsection 5 [amending section 302 of this title] shall apply to stock which is issued after December 31, 1980 (other than stock issued pursuant to a plan of reorganization approved on or before that date).
“(3) For subsection (c) (relating to application of 12-month liquidation rule).—The amendment made by subsection (c) ofsection 5 [amending section 337 of this title] shall apply to any bankruptcy case or similar judicial proceeding commenced after December 31, 1980.
“(4) For subsection (d) (relating to permitting bankruptcy estate to be subchapter s shareholder).—The amendment made by subsection (d) ofsection 5 [amending section 1371 of this title] shall apply to any bankruptcy case commenced on or after October 1, 1979.
“(5) For subsection (e) (relating to certain transfers to controlled corporations).—The amendments made by subsection (e) ofsection 5 [amending section 351 of this title] shall apply as provided in subsection (a) of this section.
“(6) For subsection (f) (relating to effect of debt discharge on earnings and profits).—The amendment made by subsection (f) ofsection 5 [amending section 312 of this title] shall apply as provided in subsection (a) of this section.
Amendment by section 1951(b)(2)(A) ofPub. L. 94–455applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1951(d) ofPub. L. 94–455, set out as a note under section 72 of this title.
Pub. L. 86–496, § 1(b),June 8, 1960, 74 Stat. 164, provided that: “The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after December 31, 1959, but only with respect to discharges occurring after such date.”
For provisions that nothing in amendment by section 11813 ofPub. L. 101–508be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) ofPub. L. 101–508, set out as a note under section 45K of this title.
Pub. L. 94–455, title XIX, § 1951(b)(2)(B),Oct. 4, 1976, 90 Stat. 1837, provided that: “If any discharge, cancellation, or modification of indebtedness of a railroad corporation occurs in a taxable year beginning after December 31, 1976, pursuant to an order of a court in a proceeding referred to in section 108
(b)(A) or (B) which commenced before January 1, 1960, then, notwithstanding the amendments made by subparagraph (A) [amending this section] the provisions of subsection (b) ofsection 108 shall be considered as not repealed with respect to such discharge, cancellation, or modification of indebtedness.”
Pub. L. 107–134, title I, § 105,Jan. 23, 2002, 115 Stat. 2432, provided that: