Chp 7 and Taxes-need info

[Minnymouth]

Ky - Minnymouth here!
In recent Chp 7 case, Trustee took my home because of hidden "unperfected title". So now I no longer own my home.
How does this affect my income taxes. Is it considered a "capital loss"???
Also will have a pending "lender negligence" suit. How does income from this affect my taxes and my bankruptcy case??
Chapter 7 was a real "mess" for me......worse case senario.....
Someday it might ALL be over......

[HRx]

Minn,

I don't believe that this classifies as a capital loss..........go to the IRS website and read the defination of capital loss, and or contact a CPA for advice.

Good Luck!

[Dam]

Ky - Minnymouth here!
In recent Chp 7 case, Trustee took my home because of hidden "unperfected title". So now I no longer own my home.
How does this affect my income taxes. Is it considered a "capital loss"???

Just curious - could you elaborate a bit about the "unperfected title"? At the time of closing, there is supposed to be "due diligence" on the part of the lender and if there was a title problem that revealed itself later, then the lender may be on the hook here.

[HHM]

I have the same question as dam, exactly what was the scenario around unperfected title. However, I doubt you can claim the loss of the house in BK as a capital loss, a captial loss presumes you have a interest in the property, so who exactly had the unperfected title.

Has there been any payment to you on the lawsuit yet. If not, then there probably are no tax implications for 2004. However, when there is payment etc, the tax implications will depend on the nature of the judgment. (i.e. damages, punitive damages, attorney fees, etc). There have been some recent cases on the tax implications of attorney fees in contingency cases.

In any case, these are questions that should be directed at a CPA.