Legal Question in Tax Law in Pennsylvania

Filing correct tax forms after bankruptcy

My husband and I filed a Ch. 7 Bankruptcy in 2005. Discharged in 2005. All property was joint so there were no assets for distribution. I know that I do not include the cancelled debt as income on my 1040. IRS Pub. 908 says to file Form 982. For Part I, do I include the total amount of debt that was filed with the bankruptcy petition? (I have received only one 1099-C from a creditor that is only for a portion of the total amount. The others don't seem to have filed anything.) Part II doesn't seem to be applicable because there are no assets. Instructions for Pub. 908 say that you ''make no reduction in basis of property that was exempt''. Our real property, the house, was exempt. Do I even need to file Form 982? Thanks for any help.


Asked on 2/07/06, 11:06 am

1 Answer from Attorneys

Re: Filing correct tax forms after bankruptcy

Unfortunately, a review of the corresponding bankruptcy documents is necessary before giving an intelligent answer. The Form 982 issue is not a yes or no question - filling out portions of that information is dependant on other portions of the 1040, including for example, the basis of any assets that were not exempt at the time of discharge. I recommend consulting with your bankruptcy attorney and/or a tax lawyer.

Here comes some necessary legalese:

((What I have written above is not tax advice, but more of a suggestion to contact someone for advice due to the fact that the question is complex. Also, to ensure compliance with CIRCULAR 230 DISCLOSURE and recently enacted US Treasury Department Regs, I am now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication is not intended or written by me to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the government, or for promoting, marketing or recommending to another party any tax related matters addressed herein.))

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Answered on 2/07/06, 12:15 pm


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