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  1. #1
    Join Date
    Aug 2007
    Posts
    7

    Default Filing Taxes After A Chapter 7 Discharge

    I was given a Chapter 7 discharge in November of 2007. I am now preparing my taxes which i do online through Turbo Tax. What I would like to know is there any extra paperwork that I need to file since I had a discharged bankruptcy in the year that I am filing? Also can the IRS hold my return or even confiscate it? I live in Maine.

  2. #2
    Join Date
    Jan 2008
    Posts
    3

    Default Re: Filing Taxes After A Chapter 7 Discharge

    Well if your discharge was within 6 months before or after of you filing your taxes, the trustee can take some. You need to check the income tax exemptions for your state. Like here in MO, the exemption is $2500. So if my tax return is more than $2500, my trustee can and will take anything over that amount. Usually the trustee will request to see your tax return if they are interested in finding more assets. So if you werent asked to show it, then you probably will not have to turn any over. I think its a case by case kinda thing. If you are having huge debt discharged, they may try to find all the assets they can. But like my friend who filed a few years back, she did not have a large amount of debt in her bankruptcy, (like a home and a vehicle) so they didnt even care to see her return.
    But you may still want to contact your trustee and find out if they need to see your return.

    Also I have never heard of any tax paperwork you have to fill out for bankruptcy when you file your return.

    And the IRS would not be the ones taking some or all of your return, it would be the trustee like I said above. The only time you would have to worry about the IRS taking anything, is if you owed the IRS money for some reason, and that was not part of your bankruptcy. (which taxes usually are not discharged in BK because there are so many rules for that, it seems impossible to me!)

  3. #3

    Default Re: Filing Taxes After A Chapter 7 Discharge

    I was discharged and closed last year as well. The trustee who was involved with my chapter 7 case after declaring me a NoAsset case, asked to see a few years of income tax and discharged and closed the case. I,m getting ready to file today and I was told that there is no problem.

  4. #4
    Join Date
    Feb 2008
    Posts
    1

    Default Re: Filing Taxes After A Chapter 7 Discharge

    Thanks for the info. I'm in a similar boat (discharged in 2007), but I received a 1099C from one of my creditors. I made so little money last year as a graduate student (less than $20k), and I have no itemized deductions to make. I would like to file on my own online (instead of paying $200+ to H&R Block). Does this 1099C mandate me seeking some more advanced accounting help to file this year?

  5. #5
    Join Date
    Jan 2008
    Location
    Alabama
    Posts
    114

    Default Re: Filing Taxes After A Chapter 7 Discharge

    Quote Quoting exesforeyes
    View Post
    Thanks for the info. I'm in a similar boat (discharged in 2007), but I received a 1099C from one of my creditors. I made so little money last year as a graduate student (less than $20k), and I have no itemized deductions to make. I would like to file on my own online (instead of paying $200+ to H&R Block). Does this 1099C mandate me seeking some more advanced accounting help to file this year?
    You should not have to pay taxes on that 1099C, it should be as simple as providing the IRS with copies of your BK schedules and discharge order, however, the majority of my clients who encountered this issue ended up seeking the help of a CPA to resolve the issue quickly.

  6. #6

    Default Re: Filing Taxes After A Chapter 7 Discharge

    So, in CA we have a $20,725 Homestead Exemption, a $3,300 vehicle exemption and a $1,100 "wild card" exemption.

    My question is about the remander (for keeping taxes) after we exempt our property. Keep in mind, we are surrendering our home so using the "in lue of Homestead" exemption status.

    We have a SUV (value $20k) and a loan ($8,900) at time of filing. We are reaffirming the loan. The difference is $11,100. After the $3,300 vehicle exemption the remainder is $7,800. We have a 2nd car (paid in full) valued at $3,000 and a damaged boat, valued at $7,000.

    Here's the caluclations:

    $7,800 (SUV after loan & vehicle exemption)
    $10,000 (2nd car & boat)
    $17,000 (Total Exemptions)

    $21,825 (Homestead & WildCard)
    -$17,800 (Total from above)
    $4,025 (Remainder for Taxes)

    Does this sound right to anyone?

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