Avoiding Taxes on Phantom Income
To streamline Chapter 11 bankruptcy filings, the Small Business Reorganization Act of 2019 created a new subchapter of Chapter 11 specifically geared toward small businesses: Subchapter V. As John W. Ryan notes in July Illinois Bar Journal article, “Avoiding Taxes on Phantom Income,” Subchapter V can be easier, cheaper, and quicker for small businesses. But it has some potential—and probably unintended—drawbacks.
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