# ORS § 314.306: 314.306 Income from discharge of indebtedness > Oregon · Statutes · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.306 ## Section - **Citation:** ORS § 314.306 - **Heading:** 314.306 Income from discharge of indebtedness - **Jurisdiction:** Oregon - **Kind:** Statutes - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** OR Code / Title 29 / Chapter 314 / Section 314.306 ## Text (1) If a taxpayer excludes an amount from federal gross income by reason of the discharge of indebtedness of the taxpayer under section 108(a)(1)(A) of the Internal Revenue Code (relating to discharge of indebtedness in a bankruptcy declared under U.S.C. Title 11), then, with respect to that portion of the excluded amount that is apportioned to Oregon, the taxpayer shall apply the rules in 11 U.S.C. 346(j), as amended and in effect on December 31, 2022. (2) If a taxpayer excludes an amount from federal gross income by reason of the discharge of indebtedness of the taxpayer under section 108(a)(1)(B) or (C) of the Internal Revenue Code (relating to discharge of indebtedness in insolvency or discharge of qualified farm indebtedness), then, with respect to that portion of the excluded amount that is apportioned to Oregon, the following paragraphs shall apply, in the following order: (a) If the taxpayer has made the election under section 108(b)(5) of the Internal Revenue Code to first reduce the basis of the depreciable property of the taxpayer, the election shall also be effective for Oregon tax purposes. A corresponding reduction in the basis of the depreciable property of the taxpayer shall be made for Oregon tax purposes. (b) The amount, if any, by which the following attributes are reduced under section 108(b)(1) of the Internal Revenue Code for federal tax purposes shall be added back for Oregon tax purposes: (A) Federal net operating loss. (B) Capital loss carryover. (C) Basis of the property of the taxpayer, excluding amounts subject to the election under section 108(b)(5) of the Internal Revenue Code. (D) Passive activity loss carryover. (c) Excluding amounts subject to the election in section 108(b)(5) of the Internal Revenue Code: (A) Any Oregon net operating loss of an individual or corporate taxpayer, including a net operating loss carryover to the taxpayer, shall be reduced by the amount of discharged indebtedness. (B) Any net capital loss for the taxable year of the discharge, and any capital loss carryover to the taxable year, shall be reduced by the amount of discharged indebtedness minus the total amount taken into account under subparagraph (A) of this paragraph. (C) The basis of the property of the taxpayer shall be reduced by the amount of discharged indebtedness minus the total amount taken into account under subparagraphs (A) and (B) of this paragraph. (D) The passive activity loss carryover under section 469(b) of the Internal Revenue Code from the taxable year of the discharge shall be reduced by the amount of discharged indebtedness minus the total amount taken into account under subparagraphs (A), (B) and (C) of this paragraph. [1995 c.556 §19; 2017 c.304 §1; 2018 c.101 §18; 2019 c.319 §18; 2021 c.456 §19; 2022 c.83 §19; 2023 c.171 §19] Source: Section 314.306 — Income from discharge of indebtedness; bankruptcy; insolvency , https://www.­oregonlegislature.­gov/bills_laws/ors/ors314.­html (accessed May 26, 2025). ## Nearby sections - [ORS § 314.011 314.011 Definitions](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.011.md) - [ORS § 314.015 314.015 Soccer referees considered independent contractors](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.015.md) - [ORS § 314.021 314.021 Application of chapter](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.021.md) - [ORS § 314.023 314.023 Application to partners in domestic partnership and to surviving partners](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.023.md) - [ORS § 314.029 314.029 Application of Deficit Reduction Act of 1984 (P.L. 98-369) and Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) to personal income tax](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.029.md) - [ORS § 314.031 314.031 Application of Deficit Reduction Act of 1984 (P.L. 98-369) and Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) to corporate excise and income tax](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.031.md) - [ORS § 314.033 314.033 Application of federal Tax Reform Act of 1986 (P.L. 99-514)](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.033.md) - [ORS § 314.035 314.035 Application of Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203), Family Support Act of 1988 (P.L. 100-485) and Technical and Miscellaneous Revenue Act of 1988 (P.L. 100-647)](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.035.md) - [ORS § 314.037 314.037 Application of P.L. 101-140, Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239) and Omnibus Budget Reconciliation Act of 1991 (P.L. 101-508)](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.037.md) - [ORS § 314.039 314.039 Application of P.L. 102-2, Comprehensive National Energy Policy Act of 1992 (P.L. 102-486), Unemployment Compensation Amendments of 1992 (P.L. 102-318), Tax Extension Act of 1991 (P.L. 102-227) and Emergency Unemployment Compensation Act of 1991 (P.L. 102-164)](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.039.md) - [ORS § 314.041 314.041 Application of Revenue Reconciliation Act of 1993 (P.L. 103-66), the Uruguay Round Agreements Act (P.L. 103-465) and P.L. 104-7](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.041.md) - [ORS § 314.043 314.043 Application of ICC Termination Act of 1995 (P.L. 104-88), P.L. 104-117, Omnibus Consolidated Rescissions and Appropriations Act of 1996 (P.L. 104-134), Small Business Job Protection Act of 1996 (P.L. 104-188), Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193)](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.043.md) - [ORS § 314.045 314.045 Application of Taxpayer Relief Act of 1997 (P.L. 105-34), Taxpayer Browsing Protection Act (P.L. 105-35), Balanced Budget Act of 1997 (P.L. 105-33), Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206), Transportation Equity Act for the 21st Century (P.L. 105-178) and Tax and Trade Relief Extension Act of 1998 (P.L. 105-277)](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.045.md) - [ORS § 314.047 314.047 Application of Tax Relief Extension Act of 1999 (P.L. 106-170) and FSC Repeal and Extraterritorial Income Exclusion Act of 2000 (P.L. 106-519)](https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.047.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_OR_T29_C314_S314.306. Check the current official text before relying on it. Not legal advice.