During$$ bankruptcy, XXX Corporation debt was reduced from $ $700$ comma $000$ to $ $360$ comma $000.$ XXX $$Corporation$\text{'}$s assets are valued at $ $670$ comma $000.$ XXX$\text{'}$s NOL carryover was $ $400$ comma $000.$

Requirements

a$.$

Is XXX Corporation required to report any income from the discharge of its$$ debts?

b$.$

Which tax attributes are reduced and by how$$ much? Assume XXX does not make any special elections when reducing its attributes.

Question content area bottom

Part $1$

Requirement a$.$ Is XXX Corporation required to report any income from the discharge of its$$ debts?

$$

Yes.

No$.$

Debt reduction during bankruptcy

$$

does not result

results

in income.