Is sale of stock going to be income?

[jandrl2001]

I am new here, have been reading this forum for about a month now and have been so appreciative of the wealth of knowledge i have gained from it.

We bought our first house 3 years ago $182,000 have second $6,500.00, the house now appraises for $160,000, owe $186,000. Have 3 cars, surrendering one, keeping 2. 45,000 in cc debt. Have always made payments on time, never missed until finally the cc were maxed out and i didn't have money to pay bills or groceries. We have bought groceries, gas, necessities on cc for a year now. End of august it all hit the fan, dh and i decided to take the plunge, with much thought, and file ch 7 (or so we thought), when we got to lawyers office we were told we had to go 13.

We are surrendering the house. We sold stock in May for a total of $2,400. My lawyer today said he was waiting for a call from the trustee, but he is going to try to get the stock sale to not count as income. He said it is not a reoccuring thing, it is exhausted.(as we do not have any more or saving for anymore). I got a call from lawyers office this afternoon stating that the lawyer did infact have a long indepth conversation with trustee herself and she would let him know her decision on Monday. Do any of you know if possibly this could be excluded?(are awaiting monday decision to know whether to wait and let fall off, or go ahead and file)

thanks for all information, it has been a great help

[liz417]

Hi and welcome to this forum Jandrl,
What reason did your attorney give that you would be unable to file ch 7? What state do you reside in?

[chloe0724]

We only had to use the last two months of income for filing for our 13. The 6 month was only to do the means test to see if we could go 7.

I hope the trustee decides to be fair.

[Flamingo]

Yes, what reason did your attorney give you that you cannot file a Chapter 7? I am assuming, from your posting, that it is only you and your husband as you do not mention any children, so it could be income; or what other assets are involved? In what state do you reside? The stock sale situation is probably all up to your trustee since it is not a large amount but no matter what the outcome, it is too late to undo now. The new law that took effect in 10/05 pushes more folks into filing Chapter 13 than Chapter 7 and you may fall into that realm due to what I mention above...without further information on your situation, it's hard for anyone to help you out.

[jandrl2001]

Thanks for replies, we reside in Arkansas, we do have 3 children. If we keep the house, we could do a 7, however we are so upside down in it and cannot afford 1360 payments. It has been an arguement between me and dh about the house, him adamently against me want to keep, but he is right, our income simply won't allow the payment and our income is too high without the deduction of keeping house.

[jandrl2001]

No assets

[Scooter10]

Thanks for replies, we reside in Arkansas, we do have 3 children. If we keep the house, we could do a 7, however we are so upside down in it and cannot afford 1360 payments. It has been an arguement between me and dh about the house, him adamently against me want to keep, but he is right, our income simply won't allow the payment and our income is too high without the deduction of keeping house.

I would go see another lawyer and get you into a 7. After you file you can let the house go if you feel the payments are to much. Worst case scenario you would be moved to a 13

[AngelinaCatHub]

Your stock in not income. You have to subtract what you bought it for. If it went up, you must pay capital gains. What is left is yours. If you take a loss, you may pay capital losses. I hope this helps. 'Hub

[fltoo]

If you made a profit on the stock, it is most certainly considered income. You report it on your tax return.
You will pay the capital gains rate tax on it.

If you lost money, then you can offset any other capital gain against the loss.

Paying capital gain losses...huh???

Your lawyer is referring to not counting it as income for the BK since it was a one time thing, which goes back to your question. Up to the trustee, I guess.

[jandrl2001]

i asked my lawyer that question also, about what we paid verses what we got, profit and loss. she said it didn't matter, it was considered income(the whole amount). I didn't understand why she couldn't deduct from our income the 100 biweekly pyments made to the plan, doesn't make sense to me.
Still waiting on trustee's decision on this, will let yall know when we hear.

[fltoo]

For tax purposes you will receive a statement stating what the taxable amount will be. It will be in one of the little boxes on the form. This is the amount of gain minus the original cost.

[AngelinaCat]

W/O reading through all of the responses—including 'Hub's--I think that if YOU own the stock directly and choose to sell it, yes, it is considered income. Now, if the stock is contained in an instrument such as a retirement account, you don’t own it directly and have no control over it. Retirement accounts are exempt.

The reason I say all this is that we were asked at our 341 if we owned any stock or bonds?

And, although I contained myself and kept my mouth shut, I was *freaking out* in my head because I knew there were stocks and bonds in our Retirement plans. This is how uneducated we were going into this—no thanks to our attorney.

This is why once we are finally through, we will be staying with this forum, so that we can post our mistakes and hopefully help others avoid similar ones.

And I might be totally wrong~~~~~

[jandrl2001]

Think the lawyer is going on just that deal about the ira's to try to get the stock exempt from income. He said if someone takes a 5,000 loan out of their ira before filing that is exempt so why couldn't a 1 time stock!! sale not be exempt, anyway i appreciate the responses, and have learned tons here, so thanks guys for all the input! Will post tomorrow on decision!



Also, not same subject but doesn't median income go up on Oct. 1?

[jandrl2001]

Well...........got two phones calls, the first one this a.m. saying trustee will go on profit and loss statement, cool, i can handle this so i get moving to get that statement sent to me. Call #2, afternoon, well trustee isn't sure she will accept that, she could call the whole amount due. SO...i am in the same spot, guess i will have to wait until dec. 1 for sale to fall off