Accelerating Losses with an Assignment for the Benefit of Creditors

(The Florida Bar Journal, Volume 81, No. 10 November 2008)

This article focuses on using an assignment for the benefit of creditors under state law to create an abandonment loss that can accelerate the timing and recognition of a loss for a real estate developer. With the ability to carryback such loss to the prior 2 tax years, the acceleration of the timing of such loss is critical so that the developer can carryback the loss to a prior year in which the developer paid income taxes resulting in a tax refund for the developer.