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Am in bankruptcy and I foreclosed my home, will there be tax

consequences on it?...
Am in bankruptcy and I foreclosed my home, will there be tax consequences on it?
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Answered in 7 minutes by:
11/3/2012
Shane-CPA
Shane-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 265
Experience: Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant
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Shane-CPA :

Hello...my name is XXXXX XXXXX I am a Certified Public Accountant. I look forward to assisting you with your question.

Shane-CPA :

Normally, debt that is forgiven or canceled is a taxable event, as the IRS considers the amount of the original loan income that was never repaid. However, bankruptcy law specifically precludes discharged debt from being considered taxable income.

Shane-CPA :

As long as the debt is discharged in a bankruptcy, and not a debt settlement arrangement, then there will not be a tax result on the discharged debt.

Shane-CPA :

I hope this provides you with the answer to your question. If you would like additional information, clarity or explanation, please let me know.

Shane-CPA :

If this answers your question in full and you are completely satisfied, please end the chat and provide me with positive feedback. As an expert, I am not compensated for my response unless I receive positive feedback. In addition, if you feel exceptional service was provided, bonuses are greatly appreciated. I look forward to being able to assist you in the future! Have a great day!

Shane-CPA
Shane-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 265
Experience: Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant
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Hi Jo...This is Shane CPA from Just Answer. I assisted you with your question a few days ago. I wanted to follow up with you to see if my response has met your needs and if there are additional questions I can help you with.

Please let me know if I can be of service to you at any time!

I look forward to hearing from you!

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Shane, CPA
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Customer reply replied 5 years ago


It was a big help because i have been worrying that i would have tax problems despite of my chapter 13 bankruptcy. i did a 13 thinking i could save my home. but, after 3 temporary modifications, i got declined so i opted to foreclose. but i keep hearing from people that i would still get taxed with my foreclosed home. i'm now holding on to that response of yours. thanks.

Hi Jo,

I am very happy that I was able to assist you. I'm glad that the information was helpful to you. Please let me know if I can be of any assistance to you in the future. Thanks again!

Shane - CPA
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Shane-CPA
Shane-CPA
Shane-CPA, Certified Public Accountant (CPA)
Category: Tax
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Experience: Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant

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