Wall Street Journal: A Tax Break for Your Kidney:

The critical shortage of organs for people awaiting transplants long has vexed policy makers and doctors. Now, an unusual approach is gaining momentum: using the tax code to encourage more people to donate. The effort started earlier this year when Wisconsin began permitting organ donors to deduct as much as $10,000 for their travel and lodging costs and lost wages. Georgia followed suit in April. At least 10 other states, including New York, New Jersey, Connecticut, Illinois, South Carolina and Minnesota, weighed similar legislation this year and are expected to reintroduce bills next year. Legislators in at least five more states, including California, Utah and Ohio, plan on sponsoring organ-donation deduction bills next year.

Wall Street Journal: Partnerships Loses Tax Exclusion on Canceled Debt:

For some real-estate investors, the "workout" just got a lot harder. A little-noticed but significant provision in the tax bill signed into law by President Bush in October makes it more difficult for certain real-estate investors to renegotiate the terms of loans on their properties in the event those properties decline in value, a process known as a debt workout. Under the provision, investors in partnerships will no longer be able to automatically exclude canceled-debt income from their personal taxable income under what is known as an equity-for-debt exception.

In the past, if a partnership obtained a loan to purchase a property and the property later declined in value, the partnership could try to renegotiate the terms of the loan to reflect the reduced value in a debt workout. In many workouts, the lender agrees to reduce the loan amount and, in turn, receives an equity interest in the partnership in order to participate in any future increase in value. The restructuring would result in the cancellation of some portion of the debt. And under the equity-for-debt exception, investors wouldn’t have to pay income tax on their share of the debt canceled in exchange for giving the lender an equity interest in the partnership.

The new act changes that. Investors in partnerships will have to pay income taxes at ordinary income-tax rates on their share of canceled debt — though there are exceptions based on a host of requirements. Investors in partnerships that renegotiate debt to reflect the lower value of their property will no longer be able to claim an exclusion, even though they may actually have less income from the property because the value has declined. (In the 1993 tax bill, Congress repealed the equity-for-debt exception for corporations.)

Wall Street Journal: Savings Accounts for Health Care Cause Confusion:

Though health savings accounts may save consumers money, right now they’re also causing some headaches.