Bankrupt and insolvent taxpayers do not recognize income if debt is discharged. They must, however, reduce specified tax attributes. What is involved? OA. Tax attributes such as a capital loss carryover cannot be taken into account until ny debt discharge due to bankrupt of insolvent taxpayers are considered. As a result, the taxpayer does not benefit from a capital loss carryover in the same year as a debt forgiveness. OB. Tax attributes such as a Net Operating Loss must be reduced even if financially troubled taxpayers do not have to recognize income. As a result the taxpayer does not benefit from both an exclusion for the debt forgiveness and the tax attributes. OC. Tax attributes such as cost of capital must be reduced before taking into account any debt discharge due to bankrupt or insolvent taxpayers. The cost of capital is reduced by 10% of the debt discharge. OD. Tax attributes such as any foreign tax credit carryovers and minimum tax credits must be reduced before taking into account any debt discharge due to bankrupt or insolvent taxpayers. As a result the only part of the debt discharge deduction that can be taken is if any taxable income is femairiing after the tax attributes.