Loss carryforwards in this situation do present a problem, but it
does not involve COD income. Rather, the problem is one of equitable
setoff. NOLs in effect represent a claim of the taxpayer
against the government for reduced taxes in the future. Equity
would seem to require the taxpayer to abandon some or all of these
claims as a setoff against the government's claims for past taxes,
without regard to whether the NOLs relate to accruals of the cancelled
tax debt or derive from deductions of items unrelated to the
tax debt. Thi