Legal Question in Bankruptcy in Virginia

Tax related-1099 issued for balance discharged from credit card

Regarding--name removed--chapter 7 bankruptcy, can--name removed--credit card/credit line issuer consider discharged balances as income and issue--name removed--1099 form to the customer forcing him to add this to his taxable income when filing his tax return?

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Asked on 4/23/04, 8:23 pm

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Tax related-1099 issued for balance discharged from credit card

They can issue a 1099, but it need not be included in income on the tax return. There is an IRS form that can be used to show changes in tax attributes due to bankruptcy, or you can just not include it. If questioned by the IRS, you simply respond that the indebtedness was discharged in bankruptcy and that will end the matter.

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Answered on 4/25/04, 6:19 pm


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