I don't see a 523 problem. If he intended to repay the debts, be it via income from his parents' business, then the fact that he has no "reportable" income is irrelevant (or so I would argue). I think your approach for Sched. I is fine. However, consider whether it might be preferable to just list income and expense as zero with an explanation under Schedule "I". You don't want to list income that doesn't really exist. I would send this guy to a CPA first to get a "second" opinion as to whether he's in possible trouble vis a vis the IRS/FTB. If not, then I think it's smarter to just list the I/J amounts as zero with an explanation, but I haven't thought it through completely.
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Mark J. Markus
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----- Original Message -----
To:
cdcbaa@yahoogroups.com
Sent: Monday, January 31, 2005 8:23 PM
Subject: [cdcbaa] Debtor employed in parents business
I will be filing a Ch7 for debtor, a member of a very traditional
family. Debtor's parents own the business, and the adult debtor
works in the business but receives no cash income from it. Instead,
debtor's compensation is that debtor lives in parents home and
receives room and board, transportation, clothing, expense money,
including payments on credit card debt etc. from the parents.
My concerns: no income tax returns, no record of ability to make
payments on revolving debt (523 or 707b issues). As for Schedule J,
I am considering estimating the market value of the room, board,
etc. which the debtor receives from the parents for the line items
on Sched J. Then, Schedule I would reflect income "in kind" roughly
equivalent to the valure of the Sched J items.
Can I get some comment from the group on this approach? I would
also appreciate any pointers from anyone who has handled this type
of case.
Thanks,
Mike Candiotti
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I don't see a 523 problem. If he intended to
repay the debts, be it via income from his parents' business, then the fact that
he has no "reportable" income is irrelevant (or so I would argue). I think
your approach for Sched. I is fine. However, consider whether it might be
preferable to just list income and expense as zero with an explanation under
Schedule "I". You don't want to list income that doesn't really
exist. I would send this guy to a CPA first to get a "second" opinion as
to whether he's in possible trouble vis a vis the IRS/FTB. If not,
then I think it's smarter to just list the I/J amounts as zero with an
explanation, but I haven't thought it through completely.
***********************************************Mark J. MarkusLaw
Office of Mark J. Markus11684 Ventura Blvd. PMB #403Studio City, CA91604-2652(818)509-1173(818)509-1460 (fax)e-mail:
bklawr@bklaw.comweb:
The post was migrated from Yahoo.