The document outlines topics to consider regarding legal and tax issues for distressed assets, including pitfalls and opportunities for sellers and buyers of underwater assets, partnership workouts, tax issues in bankruptcy, and updates to California tax laws. Specific topics discussed include loan restructuring, tax liabilities during due diligence, cancellation of debt income, reduction of tax attributes in bankruptcy, and recent California legislation. The document was presented at a commercial distressed assets conference by an attorney from a law firm specializing in tax and business law.

1. Pitfalls and opportunities in distressed assets - legal & tax panelRoger RoyseRoyse Law Firm, PC1717 Embarcadero RoadPalo Alto, CA 94303rroyse@rroyselaw.comwww.rroyselaw.comwww.rogerroyse.comSkype: roger.royseCommercial Distressed Assets & Opportunities ConferenceApril 27, 2011IRS Circular 230 Disclosure: To ensure compliance with the requirements imposed by the IRS, we inform you that any tax advice contained in this communication, including any attachment to this communication, is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to any other person any transaction or matter addressed herein.

2. 2Topics for ConsiderationSellers / Owners of Underwater AssetsBuyers / Investors in Underwater AssetsPartnership WorkoutsTax Issues in BankruptcyUpdate on California Tax Laws

3. 3Sellers / Owners of Underwater AssetsLoan RestructuringThird Party InvestmentTax Rate ChangesAbandonment / Loss / WorthlessnessForeclosure / Bankruptcy / Liens

4. 4Buyers / Investors in Underwater AssetsTax Liabilities in Due Diligence Section 382 LimitationsTax Issues in SalesDebt InvestmentsRelated Party Purchases / Investments

5. 5Partnership WorkoutsCancellation of Debt (COD) IncomeDischarge of LiabilitiesPartner DebtPassive Activity Loss Limitation RulesAt-Risk Loss Limitation Rules

6. 6Tax Issues in BankruptcyTax Advantages of BankruptcyReduction of Tax AttributesDischarge as a Purchase Price AdjustmentPriority tax claims are nondischargeable in bankruptcies involving individuals

7. 7Update on California Tax LawsCalifornia SB 401California SB 848California Prop. 24

8. 8PALO ALTO1717 Embarcadero Rd.Palo Alto, CA 94303LOS ANGELES11150 Santa Monica Blvd.Suite 1200Los Angeles, CA 90025LOS ANGELES10900 Wilshire Blvd.Suite 300Los Angeles, CA 90024SAN FRANCISCO33 New Montgomery St.Suite 1530San Francisco, CA 94105www.rroyselaw.com