Posted on: 24th Feb, 2012 02:35 am
we filed chapter 7 bankruptcy in april, 2010. we had a property worth $300,000 which was discharged and we surrendered the property. now, we have received a 1099-c from the lender where it states that i am liable for repayment of the debts and for box #6 of the 1099-c “bankruptcy†was noted by the lender as “no†. i have all my paperwork from the courts stating we are discharged from this property and debt. my question is will i have to file this $300,000 as income since the irs received the same form from the lender stating that it wasn't part of the bankruptcy or can i file form 982 and cancel this debt since i have the discharge papers from the courts stating this property was surrendered?
Hi Ryan,
If your property and the mortgage was discharged in your bankruptcy filing, then the lender won't be able to claim that it wasn't included in your bankruptcy filing. Also, it should be noted here that when debt is forgiven in a bankruptcy case, Internal Revenue Code section 108(a)(1)(A) provides that it is not to be treated as income. Thus, discharge of a debt through a bankruptcy proceeding is excluded from gross income for tax purposes. Thus, it won't be considered as taxable and you shouldn't receive a 1099c form. Contact your bankruptcy attorney and he will help you further in this matter.
Thanks,
Jerry
If your property and the mortgage was discharged in your bankruptcy filing, then the lender won't be able to claim that it wasn't included in your bankruptcy filing. Also, it should be noted here that when debt is forgiven in a bankruptcy case, Internal Revenue Code section 108(a)(1)(A) provides that it is not to be treated as income. Thus, discharge of a debt through a bankruptcy proceeding is excluded from gross income for tax purposes. Thus, it won't be considered as taxable and you shouldn't receive a 1099c form. Contact your bankruptcy attorney and he will help you further in this matter.
Thanks,
Jerry
Welcome Ryan,
I guess there has been a misunderstanding and mis-communication on the part of the lender. You should contact your lender and clarify your position. In case, it does not solve your problem, then you should contact your bankruptcy attorney as Jerry has suggested and take his opinion in this matter.
I guess there has been a misunderstanding and mis-communication on the part of the lender. You should contact your lender and clarify your position. In case, it does not solve your problem, then you should contact your bankruptcy attorney as Jerry has suggested and take his opinion in this matter.