If I did a deed in lieu in March 2013 and did bankruptcy, all debts discharged, just got a 1099A form from IRS, does this mean I pay taxes on this? 23 Answers as of February 25, 2014

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Look at IRS form 982 - you can avoid the tax by using this form.
Answer Applies to: California
Replied: 2/25/2014
Stephens Gourley & Bywater | David A. Stephens
If it was your residence, probably not.
Answer Applies to: Nevada
Replied: 2/21/2014
A Fresh Start
A Fresh Start | Dorothy G Bunce
At the time you did the deed in lieu of foreclosure, were you insolvent? The IRS website has very specific factual criteria for determining this and you can easily review it at the IRS website. If this property were your residence, you are lucky that the Mortgage Foregiveness Act was in effect until December 21, 2013 and made the forgiveness of debt not subject to taxes.
Answer Applies to: Nevada
Replied: 2/21/2014
Hoang & Tran PLLC | Adam Tran
I am not sure what a "deed in lieu" means, but a 1099A if notice form to you. The Form refers to real property you gave back to your lenders. When they take it back, they may be taking it at a loss. This is sometime used to show their loss and may possibly may be "income" to you. You should consult an accountant, CPA, EA or tax consultant for advice and review of your 1099A.
Answer Applies to: Texas
Replied: 2/21/2014
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
This is a disputed issue right now so you will have to check with your accountant
Answer Applies to: New York
Replied: 2/21/2014
    Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
    That is a good question for a CPA. I do not give tax advice of that nature.
    Answer Applies to: Arkansas
    Replied: 2/21/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    No, it's just automatic to issue a 1099A because if you hadn't filed bankruptcy, the debt forgiveness might be a taxable event, although unlikely in your case even without a bankruptcy.
    Answer Applies to: Oregon
    Replied: 2/21/2014
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Probably not but it is a tax question. You will need to ask a tax professional this question.
    Answer Applies to: California
    Replied: 2/21/2014
    Stuart P Gelberg
    Stuart P Gelberg | Stuart P Gelberg
    No. see IRS form 982(?)
    Answer Applies to: New York
    Replied: 2/21/2014
    Marc S. Stern
    Marc S. Stern | Marc S. Stern
    It means that you need to provide the IRS with confirmation that the debt was discharged in bankruptcy. There is a specific for this. More information is available here: http://www.irs.gov/pub/irs-pdf/p908.pdf
    Answer Applies to: Washington
    Replied: 2/21/2014
    Patrick W. Currin, Attorney at Law | Patrick Currin
    No, you will have no income for debt forgiveness in the same year you declare BK.
    Answer Applies to: California
    Replied: 2/21/2014
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    It depends on when you did the deed in lieu. If after you filed for bankruptcy relief, you can invoke the exemption from taxation for debts discharged in bankruptcy. If you did the deed in lieu before filing the bankruptcy petition, you will need to avail yourself of any other exemption available, if any. I believe there may have an exemption from taxation for your principal residence available through the end of 2013. You may also qualify for exemption due to insolvencies. However, there may also be some capital gain tax liability. You should consult a reputable Tax Accountant or Tax Attorney.
    Answer Applies to: California
    Replied: 2/21/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    You need to speak with you tax preparer. The answer may depend upon the relative timing of the bankruptcy and the deed in lieu and when each of those was completed.
    Answer Applies to: Colorado
    Replied: 2/21/2014
    The Law Offices of Deborah Ann Stencel | Deborah A. Stencel
    Probably not. Consult a tax professional to be certain. To get some preliminary information go to the IRS website and search for Topic 431, Publication 4681, and 1099-A.
    Answer Applies to: Wisconsin
    Replied: 2/21/2014
    Portland Bankruptcy Law Group
    Portland Bankruptcy Law Group | Christopher J. Kane
    No, you never have to pay income taxes on debts that were discharged in bankruptcy.
    Answer Applies to: Oregon
    Replied: 2/21/2014
    Fluhr & Moore, LLC | Steven S. Fluhr
    Tax questions should be to a tax advisor like a CPA or LLM in taxaton.
    Answer Applies to: Missouri
    Replied: 2/21/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    If you filed bk in advance of receiving the 1099 then you can dispute the 1099 through the appropriate IRS form. You do not have to pay tax on it but you must submit the form to the IRS or you will be assessed the tax erroneously.
    Answer Applies to: Nevada
    Replied: 2/21/2014
    Law Offices of Eric W. I. Anglin
    Law Offices of Eric W. I. Anglin | Eric W. I. Anglin
    You do not pay taxes on discharged debts. You will need to complete an IRS Form 982 and submit it with your tax returns. If you use a tax preparer such as H.R. Block, make sure that you bring a copy of your discharge order with you so that he/she does not include that 1099 as income.
    Answer Applies to: Indiana
    Replied: 2/21/2014
    R. Steven Chambers PLLC | R. Steven Chambers PLLC
    No. There is a provision in the Internal Revenue Code that exempts debts discharged in bankruptcy from the definition of "income." Ordinarily, forgiven debt is income subject to tax but debts discharged in bankruptcy are not forgiven debts.
    Answer Applies to: Utah
    Replied: 2/21/2014
    Law Offices of Linda Rose Fessler | Linda Fessler
    You should be entitled to a waiver under the Mortgage Relief Act which was extended to December 31, 2013. Go to IRS Form 982.
    Answer Applies to: California
    Replied: 2/21/2014
    Kenneth A. Parker, P.C.
    Kenneth A. Parker, P.C. | Ken Parker
    Yes, but since you filed bankruptcy, there is a form you can file with your tax return indicating you filed Bankruptcy. I would contact a CPA and have them do your return so you can make sure the proper forms are sent in with your return.
    Answer Applies to: Georgia
    Replied: 2/21/2014
    Stittleburg Law Office
    Stittleburg Law Office | Bernd Stittleburg
    Have your tax accountant complete IRS Form 982 and attach it to your 2013 tax return.
    Answer Applies to: Georgia
    Replied: 2/21/2014
    OlsenDaines, PC
    OlsenDaines, PC | Kristoffer Sperry
    The 1099C you received from the creditor is pretty standard. This just means that they've forgiven the debt and won't be trying to collect against you ever again. Have your accountant review IRS form 982; because you filed bankruptcy you are presumed "insolvent" and need to check the appropriate box on the form then that 1099C will not count as income against you for tax purposes.
    Answer Applies to: Idaho
    Replied: 2/21/2014
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