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Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1608
Experience:  Certified Public Accountant
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Is it possible to owe $20,000 in personal taxes if primary

Customer Question

Is it possible to owe $20,000 in personal taxes if primary house was foreclosed on in 2010, I filed personal bankruptcy in 2010 but had taken $70,000 equity out of the house in 2006?
These are taxes for 2010
Submitted: 6 months ago.
Category: Tax
Expert:  Mark Taylor replied 6 months ago.

Hi my name is Mark. I will be happy to help you with your questions. Did you receive a 1099-C for cancellation of debt income is 2010?

Expert:  Mark Taylor replied 6 months ago.

What type of bankruptcy did you file?

Customer: replied 6 months ago.
Not sure about 1099-C because I gave all my paperwork to someone to work on my taxes.
Chapter 7 bankruptcy
Expert:  Mark Taylor replied 6 months ago.

Did you have a liability on your 2010 return? Did the IRS send you a notice that they were adjusting your return? I am assuming that the 2010 tax liability was not included in your bankruptcy.

Customer: replied 6 months ago.
2009 was the last year that I filed taxes so no 2010 is not adjusted because it hasn't been filed.
Just trying to see of the person I have doing my taxes shouldn't be....
Expert:  Mark Taylor replied 6 months ago.

Ok, you tax liability would depend on your Adjusted gross income (wages, interest, dividends exc. less any deductions). You would also have deductions for your personal exemptions and either a standard deduction or itemized deduction. Do you know approximate how much income you had in 2010?

Customer: replied 6 months ago.
Unfortunately, I do not have any of the W2's or paperwork in front of me now. I believe my income was around 50k
Expert:  Mark Taylor replied 6 months ago.

If your income is only $50,000 I do not see where the 20,000 tax liability is coming from. With only $50,000 income $20,000 seems high even if you consider penalties and interest. Were you self employed in 2010?

Customer: replied 6 months ago.
No not self employed
Expert:  Mark Taylor replied 6 months ago.

Based on $50,000 of income your tax liability for the year should not be $20,000. When you have more information, I can review your situation in detail.

Expert:  Mark Taylor replied 6 months ago.

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Please let me know if you have any questions or need clarification. I am happy to help