1099-A and 1099-C

[bntactnt]

I received 1099-A & 1099-C tax forms and will file Ch.7 BK this week on or before 4/15/10.

Questions:
1. Do I have to send BK notice to IRS notifying them that I file BK? If no, then do I need to send in form 982 after I receive the discharge paper from the BK court?
2. On properties already foreclosed, do I list these on schedule F "Creditors Holding Unsecured Nonpriority Claims" OR on schedule D "Creditors Holding Secured Claims"

I need your urgent help!

Thank-You!

[justbroke]

1. Do I have to send BK notice to IRS notifying them that I file BK? If no, then do I need to send in form 982 after I receive the discharge paper from the BK court?

You may need to hold off on filing the 982? You should speak with a qualified tax professional who deals with these. Since you haven't actually discharged them yet -- because you haven't even filed BK yet -- it's difficult to claim that they were discharged in BK before the actual case is even filed, let along discharged. I'm not a tax professional, and this is not tax advice, but perhaps you can file an EXTENSION to file your 2009 Return. This will provide time to file BK and to get the discharge. Again, you should really be speaking with a qualified CPA or other tax professional. There could be some tax liability if you file the 1099-A/C and/or 982 incorrectly!

2. On properties already foreclosed, do I list these on schedule F "Creditors Holding Unsecured Nonpriority Claims" OR on schedule D "Creditors Holding Secured Claims"

They are not secured anymore. Since they are foreclosed, the lender may have a "potential" Schedule F Unsecured Claim. i would list the creditor/lender on Schedule F, check the "contingent" box, and list the amount due as "unknown" or $1.

You are using an attorney for this, right?

[spetkovich]

If certificate of title has already passed, then they are Schedule F creditors. However, if the properties are in foreclosure but the certificate of title has NOT already passed, then they are Schedule D creditors.

[iv65536]

I agree with JB - you need a tax professional with experience in dealing with foreclosures and canceled debt. I would go ahead with Form 4868 (and applicable state form, if any) for the automatic extension of the time to file. What's more, I don't see where a trustee could object to spending a few hundred dollars that can't be exempted on this type of an issue because I would consider a correctly-prepared tax return to be a necessity. The documentation the IRS provides could be reasonably considered to be difficult to understand.