Does any one know anything about being taxed on the debt you had discharged? I've filed my taxes already, but a friend asked me if dicharged "debt" could in fact be retro-taxed as "income." I can see the logic in the question, but have little information about it.
-
-
You can search at the IRS about that.
That topic has also been discussed here before. Try the Search function, upper right.
Debts discharged outside of BK are indeed considered taxable income. That part I do know for sure.
There's some provision for Insolvency that can get you around that. But insolvency requires detailed paperwork provided by the IRS that you must prove you had no assets and no monies.Filed Ch 7 - 09/06
Discharged - 12/2006
Officially Declared No Asset - 03/2007
Closed - 04/2007
I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.
Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen... -
There is no tax liability on debts discharged in bk.Comment
Comment