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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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If the bankruptcy trustee sells an investment property for

Resolved Question:

If the bankruptcy trustee sells an investment property for the purpose of settling with my creditors to some extent, is the trustee also required to pay the capital gains resulting from the sale?
Submitted: 7 years ago.
Category: Tax
Expert:  Lev replied 7 years ago.

Generally - income tax liability is a responsibility of the owner of the sold property - and should be paid from owner's funds.


The trustee is acting under the court supervision and his/her responsibilities include to satisfy any tax debt as the first priority.


I would expect that the trustee to put aside some amount to cover your tax liability - federal and state (if any).

If you feel that is the issue - you may file a complain to the court which appointed the trustee.


If the trustee will mismanage funds and at the tax time - there will not be enough funds to cover your tax liability and there would be additional penalties - you may file a complain to the court and in also sue the trustee for damages.


But the tax liability - would be your's - not trustee's liability - that would be between you and the IRS.

Let me know if you need any help.


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