Solvent taxpayers must generally recognize COD currently, even
if they remain financially troubled. Under former law, an election
was generally available to solvent taxpayers to defer tax by reducing
the basis of their assets instead. 4 1 The election was repealed in
1986,42 and is currently available only to farmers 43 and taxpayers
in the real estate business." Congress has frequently oscillated without apparent reason between taxing solvent taxpayers currently,
and allowing basis reduction instead.45 The present state of
the law of COD income is unstable and in great confusion. 4