On November 10, 2025, the IRS issued Rev. Proc. 2025-31 (the Rev Proc.), which provides a safe harbor for investment trusts and grantor trusts to stake certain digital assets without jeopardizing their status as trusts for U.S. federal income tax purposes. The Rev. Proc. comes in response to the White House’s request made in July 2025 for published guidance on this topic.[1]
When borrowers struggle to meet their debt obligations, they may negotiate with creditors to modify the terms of their debt instrument. This could involve changes to the interest rate, repayment period, collateral, or other aspects of the debt. However, these modifications could potentially result in a taxable exchange of the original note for a modified one, a fact that may not be immediately apparent to the involved parties.
Businesses can claim a bad debt deduction under the Internal Revenue Code when a customer fails to pay for services or products. However, the ability to claim this deduction depends on several factors, and businesses should be prepared to substantiate their claim if challenged by the IRS.