Exclusion of discharge of indebtedness

(a) In general Section 108(a)(1)(E) is amended to read as follows: (E) the taxpayer is an individual.. (b) Coordination of exclusions Section 108(a)(2) is amended— (1) by striking subparagraph (C), (2) by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively, (3) by inserting before subparagraph (B) (as so redesignated) the following new subparagraph: (A) Individual exclusion takes precedence Subparagraphs (A), (B), (C), and (D) of paragraph (1) shall not apply to a discharge to which subparagraph (E) of such paragraph applies., and (4) in subparagraph (A) (as so redesignated), by inserting over insolvency exclusion, qualified farm exclusion, and qualified real property business exclusion after precedence in the heading. (c) Conforming amendments (1) Section 108 is amended by striking subsections (f) and (h). (2) Section 163(h)(3)(F) is amended by striking clause (iv). (d) Effective date The amendments made by this section shall apply to debt incurred after December 31, 2026.