Hello and welcome to JustAnswer.com
How are you today?
ok and yourself?
I hate to be the bearer of bad news, but if the debt was not included in your bankruptcy, then it would be includable in income
However, if you are insolvent there is an exclusion.
If your liabilities immediately prior to the foreclosure are greater than your assets immediately prior to foreclosure, you can exclude the amount by which your liabilities exceed your assets. So, this may help.
the debt was included and listed
Okay then if it was in your bankruptcy then it's excluded
This is not income to you.
so why would they send me a 1099
the property foreclosed after my bk was discharged
They still send out the 1099 because they are required to, but when you file your tax return on form 982 you will indicate that the debt was discharged in bankruptcy and you will be fine.
I was trying to work with the bank to sell the properties after the bk and was in a middle of a divorce and my ex blocked the sale of the properties so they foreclosed
I'm sorry to hear that. However, if it was listed and included in the bankruptcy you are fine.
are you sure about this because I have a CPA that does my taxes and I do have some carry back losses from previous and he thinks its income
so do I just tell him to use the form 982? and you said
Yes, if the debts were discharged due to bankruptcy then they are not included in income.
Also, if you are insolvent, the amount would be excluded. They would also be excluded if you had non-recourse debt.
ok I will tell him thank you
Is there anything else I can assist you with today?
I sure hope this works
if not, please rate as "excellent" so that I may receive credit for assisting you today
I wish you the best of luck with this!
ok thanks again
I will send a copy of the message you gave me to my cpa right now and see what he says
If you would, please rate so that I may receive credit for assisting you
This is from the IRS:
Is Cancellation of Debt income always taxable? Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:
Hope that helps.