Closed business reported loss in 2005

[time4cake]

My former business filed its final return as of December 31, 2005. It reported a substantial loss in 2005. I did not include any portion of this loss in my gross income calculation on the means test. Would it be more advantages to wait until July of 2006 to file for Chapter 7, thereby having the six month income period not contain any information from the business? Or should we file as soon as possible and attempt to allocate a portion of that business loss to my income calculation?

[SinkingFast]

This is a question best left for an attny to answer.

Business BK and personal BK are 2 different animals. And where business meets personal,........ I don't know.

[time4cake]

Let me be more clear. The business is taxed as a partnership, so its income flows through directly to my personal tax return. Basically my thought is that having the business still around during the 6 month look back period in which to establish income muddies the waters, and I may be better served waiting until last years issues lapse in regards to the look back period.

[aa06a47]

I have heard some horror stories about people with business and bk....records back 20 years, ect. Partnerships are generally a little different, in that you have a tax record you receive from the primary partner. It might not be as difficult as if you directly owned a business. Talk to your attorney, there may be no reason to wait.

[djk]

if you are/were a contractor who builds half million dollar houses for investments and the market went bust then I would think you might want the partnership loss to balance the stated 104 grand income, it would seem to beat the alternative you suggested of dumping everything and living on the beach without a job for 6 months. Another thing, if the business is bust, are you now unemployed? if so, with all the expenses and no current income your balance sheet should be about prime in as little as 60 days, maybe even a month. It seems like you have not even had a couple free consultations to run this brainstorm across someone who could actually give you good advice, I'd suggest you do that.

[SinkingFast]

I would think if you typically claimed any profits as income and were taxed on said profits as such, then losses would be treated the same way,.......... Would they not??

When you filed income taxes, did you claim the profits and/or the losses on your personal income taxes?? If so, then why wouldn't it be handled the same when filing BK??!!

[time4cake]

I agree that it should be handled that way. My question is do I want it to be put into the equation. I like the idea of having less income and more easily qualifying for Chapter 7, but I don't like the idea of having to divuldge to my former business partners that I am filing bankruptcy. Nor do I want to complicate matters by having to compile years worth of business transactions. Just seems that if the business drops off the map it would be more of a "Vanilla" case, as opposed to the "Neopolitan" case I would be filing with the business loss included.

Please comment

[time4cake]

Just to answer my own previously started post:

My attorney stated that the "Means Test" is not a tax return, and as such does not afford a place to enter business losses.