If you filed bankruptcy on a rental property and you short sale it will you still have to pay taxes on a 1099.

Asked almost 4 years ago - Bakersfield, CA

The IRS has a form 982 that says if you filed bankruptcy you don't have to pay taxes. Does this include a rental property. I used to live in it for 13 months. I only rented it for 18 months. Could someone please advise me.

Attorney answers (3)

  1. Frank Wei-Hong Chen

    Contributor Level 20

    Answered . No. Debts discharged through bankruptcy (including on rental property) are not considered taxable income. This exception is discussed in detail in IRS Publication 4681:

  2. Theodore Lyons Araujo

    Pro

    Contributor Level 20

    Answered . The regulations where changed in 2007. Why do the short sale anyway? Makes no sense for the homeowner if you are going to file bankruptcy.

  3. Dorothy G Bunce

    Pro

    Contributor Level 20

    Answered . See my answer to the question you reposted a few minutes after this post.

Related Topics

Debt

There are different types of debt, but all involve one person (the debtor) owing money to another (the creditor). Terms of repayment are governed by a contract.

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