Question Filing 2008 Taxes after Chapter 7

[TheBrokeCouple]

We utilized this web site to the utmost this past year. Thanks again to everyone. Everyone that is in our shoes right now, hang in there....it does get better.

We are doing very well, paying all bills on time. We are working towards saving for a home and building a savings account. Bankruptcy was the best choice for our family.

I have a question about tax time. I always do our taxes on HRBlock.com.
While filling out the documents, it asks about our tax rebate money. We did recieve 1800.00 that was taken by the trustee. They then want to take this off of the top of our refund...something we never even had. My husband is very angry about this.

Also, we are unsure if there is anything special we need to do regarding our taxes since we gave our home back to the bank. Is there anything we could do as far as our taxes are concerned to prevent losing out on our $1800?

Any suggestions would be appreciated.

Thanks so much

TheBrokeCouple - Indiana

[magyar123]

Try it on Turbo Tax, to see if it comes up with the same crap.
On the other hand - last year you did get that Bushy stimulus amount as far as the IRS was concerned. The fact that it got stolen from you by the trustee is a non-issue as far as your new tax return is concerned.

[Never_Again]

Ok...

It was not "Stolen" from them... it was an asset that was seized by the trustee under the same laws which allowed them to discharge however many dollars of debt that they discharged.

And yes, according to the IRS, you HAVE received it. What was done with it after is none of their concern, weather you spent it, saved it, gave it away, or had it seized by the trustee.

[Greenie]

I thought the stimulus wasn't taxable and wasn't supposed to reduce your 2008 refund.

This is from the IRS website:

"It's an economic stimulus payment that more than 124 million households will receive. It's not taxable, and it won't reduce your 2007 or 2008 refund or increase the amount you owe when you file your 2008 return. Payments started in May and will continue through the end of 2008."

http://www.irs.gov/newsroom/article/0,,id=179211,00.html

[momof3b1g]

I thought the stimulus wasn't taxable and wasn't supposed to reduce your 2008 refund.

This is from the IRS website:

"It's an economic stimulus payment that more than 124 million households will receive. It's not taxable, and it won't reduce your 2007 or 2008 refund or increase the amount you owe when you file your 2008 return. Payments started in May and will continue through the end of 2008."
http://www.irs.gov/newsroom/article/...179211,00.html

Thats what i thought. But is it actually taking that amount out of your refund? Or is it just listed on your return? Just like a wash?

Oh and as far as the op, yes you received it and the trustee used it to pay your bills. So you may have not spent it but were do it. And in reality received it.

[magyar123]

Ok...

It was not "Stolen" from them... it was an asset that was seized by the trustee under the same laws which allowed them to discharge however many dollars of debt that they discharged.

And yes, according to the IRS, you HAVE received it. What was done with it after is none of their concern, weather you spent it, saved it, gave it away, or had it seized by the trustee.

Stolen / seized - not much of a difference

[Never_Again]

The stimulus, I believe, will be paid to SOME taxpayers who did not receive it for various reasons at the normal time. It is like a tax credit that has already been paid, so you can't get it twice. It does not reduce a refund of overpaid taxes.

Stolen and seized are quite different! Stolen is illegal, as in the trustee had no right to this money. Seized, means that the trustee took an asset that he was legally entitled to under either the federal laws or the laws of the state that the petitioner lives in.

So, if the trustee "stole" the money, then did the petitioner "steal" money from their creditors?

Bankruptcy is a law that allows people a fresh start. Some things have to be given up in this, as a trade off to discharge the debt. If you had to give up more than you received for a benefit, why would you do it?

To the OP... honestly, you are just going to have to accept the loss of the stimulus money as a price of discharging the debt. I know, it sucks, but that is the breaks.