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October 2004 Plain Language Regulations

Information Reporting Under Section 6050P for Discharges of Indebtedness
The IRS and the Treasury Department are issuing final regulations that provide guidance on when an organization has a significant trade or business of lending money for purposes of reporting cancellation of indebtedness under section 6050P(c)(2)(D). Section 6050P(a) requires applicable entities to file information returns with the IRS when discharging indebtedness of $600 or more during a calendar year.  Section 6050P(d) requires applicable entities to furnish information statements to debtors reporting discharges of indebtedness of $600 or more.  Section 6050P(c)(2)(D) includes within the definition of "applicable entity" an organization that has a significant trade or business of lending money.  These final regulations provide that the lending of money is a significant trade or business if money is loaned on a regular and continuing basis.  TD 9160.  Published October 25, 2004.
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