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Tax refund
Debtor receives a tax refund for 2017but the bulk of the refund is for earned income credit and child tax creditnot for overpayment of income tax.
For a chapter 7:
Are the tax credits considered income for purposes of the means test?
If yes, then if the tax credit was received during the means test period, would the debtor be able to prorate the incomeor would the debtor have to include the entire amount actually received during the means test period?
E.g., debtor receives tax credits totaling $5,000.00 on March 1 for tax year 2017. Debtor decides to file Chapter 7 in April 2018. Would the entire $5,000.00 have to be included as income because the means test period runs from 10/1/17 to 03/31/18or could the debtor prorate the amount to $1,250.00? (10/1/17 to 12/31/17 3 months. 3/12 * 5,000.00$1,250.00)?
If not income, then I am assuming that the tax credits (not the refund for overpayment of income tax) would offset any taxes withheld during the means test period for tax year 2018correct? Does the fact that you can exempt the tax credits change the analysis in any way?
Christie Cronenweth
Law Offices of Christie Cronenweth
25202 Crenshaw Blvd., Suite 207
Torrance, CA 90505
310-257-4995 ph
310-257-4996 fx
cronenwethlaw@yahoo.com
www.cronenwethlaw.com
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The Law Offices of Christie Cronenweth is a debt relief agency engaged in the practice of aiding people to file for bankruptcy under the Bankruptcy Code.
Debtor receives a tax refund for 2017but the bulk of the refund is for earned income credit and child tax creditnot for overpayment of income tax. For a chapter 7: Are the tax credits considered income for purposes of the means test? If yes, then if the tax credit was received during the means test period, would the debtor be able to prorate the incomeor would the debtor have to include the entire amount actually received during the means test period?E.g., debtor receives tax credits totaling $5,000.00 on March 1 for tax year 2017. Debtor decides to file Chapter 7 in April 2018. Would the entire $5,000.00 have to be included as income because the means test period runs from 10/1/17 to 03/31/18or could the debtor prorate the amount to $1,250.00? (10/1/17 to 12/31/17 3 months. 3/12 * 5,000.00$1,250.00)? If not income, then I am assuming that the tax credits (not the refund for overpayment of income tax) would offset any taxes withheld during the means test period for tax year 2018correct? Does the fact that you can exempt the tax credits change the analysis in any way? Christie CronenwethLaw Offices of Christie Cronenweth
The post was migrated from Yahoo.
There was an ABI article on this issue recently which went over the courts
different approaches to allocating the refund between the spouses.
On Feb 15, 2013 10:28 AM, "sbombalier" wrote:
> **
>
>
> I need assistance once again, I have a PC who is married but filed C7 by
> himself. He's getting a tax refund, which we cannot exempt. The trustee is
> telling me that he's entitled to 100% of the refund. Isn't the non-filing
> spouse entitled to her 50% community interest?
>
> As always, any imput is greatly appreciated.
>
> Silvia
>
>
>
There was an ABI article on this issue recently which went over the courts different approaches to allocating the refund between the spouses.
On Feb 15, 2013 10:28 AM, "sbombalier" <bombalier@aol.com> wrote:
I need assistance once again, I have a PC who is married but filed C7 by himself. He's getting a tax refund, which we cannot exempt. The trustee is telling me that he's entitled to 100% of the refund. Isn't the non-filing spouse entitled to her 50% community interest?
As always, any imput is greatly appreciated.
Silvia
The post was migrated from Yahoo.
Unfortunately for your PC, I believe that the Trustee is correct. 100% of community assets are part of the debtor's bankruptcy estate.
Frank X. Ruggier
Price Law Group, APC
15760 Ventura Blvd., Suite 1100
Encino, CA 91436
Direct: (818) 205-2406
Fax: (818) 907-2106
www.pricelawgroup.com
The post was migrated from Yahoo.
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All community property is property of the estate and belongs to the Trustee.
ent: Feb 15, 2013 10:28 AM To: cdcbaa@yahoogroups.com Subject: [cdcbaa] Tax refund
I need assistance once again, I have a PC who is married but filed C7 by himself. He's getting a tax refund, which we cannot exempt. The trustee is telling me that he's entitled to 100% of the refund. Isn't the non-filing spouse entitled to her 50% community interest?As always, any imput is greatly appreciated.Silvia
The post was migrated from Yahoo.
I need assistance once again, I have a PC who is married but filed C7 by himself. He's getting a tax refund, which we cannot exempt. The trustee is telling me that he's entitled to 100% of the refund. Isn't the non-filing spouse entitled to her 50% community interest?
As always, any imput is greatly appreciated.
Silvia
The post was migrated from Yahoo.