Cancellation of Debt Income from 2nd TD - Currently in Chapter 13
Posted: Fri Mar 11, 2016 6:09 am
IRC 108 uses the phase "the discharge occurs in a title 11 case"
The word discharge in this phrase doesn't refer to the bankruptcy discharge, rather it refers to the transaction giving rise to the forgiven debt which in fact is occurring in a title 11 case.
I think your client has a good argument to claim the IRC 108(a)(1)(A). Your client may need to amend his return for that year if the chapter 13 case is dismissed and there wasn't a balance sheet insolvency on the transaction date as well.
Sent from my iPhone - please excuse typos.
Thank you.
> On Mar 11, 2016, at 5:37 AM, Daniela Romero dromerolaw@gmail.com [cdcbaa] wrote:
>
> Hi Nate,
>
> Just brainstorming, but I think that the accountant can still file the IRS 982, check the "insolvency" box and add a letter of explanation.
>
> Sincerely,
>
>
> Daniela P. Romero
> Law Offices of Daniela Romero, APLC
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>> On Thu, Mar 10, 2016 at 11:35 PM, stephenburtonlaw stephenburtonlaw@yahoo.com [cdcbaa] wrote:
>>
>> They are not attempting to collect a debt. They are writing it off >>
>>
>> Sent from the Samsung Galaxy Rugby Pro, an AT&T LTE smartphone
>>
>>
>>
>> -------- Original message --------
roups.com>
>> Date: 03/10/2016 11:27 PM (GMT-08:00)
>> To: cdcbaa@yahoogroups.com
>> Subject: Re: [cdcbaa] Cancellation of Debt Income from 2nd TD - Currently in Chapter 13
>>
>>
>>
>> I forgot to ask, but is there any way to deem it a violation of stay to file a cancellation of debt income to trigger an event of possible taxable income when the Chapter 13 was already filed years ago? I don't see how, but just thinking out loud since my client is an attorney as well.
>>
>> Nate Berneman
>>
>>
>> On Thursday, March 10, 2016 11:17 PM, "Nathan Berneman nathanberneman@yahoo.com [cdcbaa]" wrote:
>>
>>
>>
>>
>>
>> Client in a current Chapter 13 from 2011. Motion to Avoid Junior Lien filed and granted.
>>
>> Client just received a 1098 Cancellation of Debt Income from the 2nd TD holder and
>> now they have a possible problem that it could be considered income on their 2016 taxes.
>>
>> Their Discharge most likely won't take place until sometime in 2017.
>>
>> Section 108 of the IRS Code only applies if there is a Discharge or they can prove they are insolvent.
>>
>> Anyone see this problem before? Any thoughts would be appreciated.
>>
>> Thanks,
>>
>> Nate Berneman
>
>
The post was migrated from Yahoo.