Legal Question in Bankruptcy in Maryland
Rental property depreciation tax breaks and bankruptcy
If I claim bankruptcy, will I have to pay back the federal government any money for past depreciation I've claimed on a rental property?
Asked on 10/31/98, 2:53 am
1 Answer from Attorneys
Daniel Press
Chung & Press, P.C.
Re: Rental prop. depreciation and bankruptcy
If you file bankruptcy and the trustee sells your property, the TRUSTEE will have to pay capital gains tax on the sale, taking into account the reduced basis resulting from your depreciation of the property. The effect may even be to make the sale of the property not worthwhile to the trustee, and he may let you keep it. You need to go over these issues with experienced bankruptcy counsel who knows something about taxes as well.
Daniel Press
Chung & Press, P.C.
6723 Whittier Ave., Suite 302
Answered on 1/05/99, 4:29 am
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