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cortrightlaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 513
Experience:  Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
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Does a Bankruptcy protect me from paying any IRS taxes from

Customer Question

Does a Bankruptcy protect me from paying any IRS taxes from a foreclosure, deed in lieu , a short sale or even if I sell it myself for what I owe to the bank.

My rental property was foreclosed by the bank and I received a 1099A form will I have to pay IRS taxes on the deficiency if I am protected under the bankruptcy law.
Is a 1099A also considered a bank forgiveness document?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cortrightlaw replied 5 years ago.

cortrightlaw : Yes filing bankruptcy will protect you from the 1099.
cortrightlaw : Did you already receive the 1099
JACUSTOMER-0wl0vk7v- :

Yes I did on a rental property I had last year. However a realtor suggested I do a short sale on my main residence and he wants to list it for 150,000 less then what is owed. It seems like a lot so I don't want to get stuck with a difficiency of 150,000 and have to pay 70,000 IRS taxes.

cortrightlaw : There is a good video on the subject and that explains it very well, I could post it here for you but it would be later today after my court hearings, or you can go on YouTube and do a search for Mr Credit, scroll through his videos and he has one titled something like why you must do a bankruptcy before you do a short sale.
JACUSTOMER-0wl0vk7v- :

Do you do bankruptcys in Chicago?

cortrightlaw : No I am a California lawyer.
JACUSTOMER-0wl0vk7v- :

Do you know a good bankrutcpy attorney in Chicago. Thank you for your assistance!

cortrightlaw : unfortunately I do not have a recommendation for you, a good place to start is your states attorney bar association, they will have someone to refer you to.
cortrightlaw :

Have I satisfactorily answered your question? If I have please remember to click the GREEN ACCEPT BUTTON so that I will receive credit and compensation for my time (doing so does not end our discussion), i will gladly clarify my response or respond to follow up questions if needed.