If a business was sold in 1987 but kept open and still shows on taxes is this open to questioning even though no income?
The trustee generally will not go back more than 2-3 years....if that. In the many petitions that I have prepared, if the business is not making money, the business is not making money. The trustee still will ask questions about the business, but if you are honest (which you are required to be), is not making money and has no value than you have nothing to worry about. My concern is that you have to ask the question in the first place, is there something else you are worried about. I feel I am not getting the full story.Contact me if you have something you would like to discuss that you do not want to put on the web.
The Chapter 7 Trustee can go back as far as necessary to do his job. His job is to identify any non-exempt assets that can be marshalled for the benefit of creditors. It would be very unusual for a Trustee to have any interest in a business sold in 1987, but I share the concern that you were prompted to ask the question. Is there something that you are concerned with the Trustee uncovering? If so, that is something you need to carefully discuss with an attorney.
Stephen Harkess is an attorney licensed in the state and federal courts of Colorado. This answer is for general information only and does not create an attorney client relationship between Stephen Harkess or Harkess & Salter LLC and any person. You should schedule a consultation with an attorney to discuss the specifics of your legal issues. You can reach Harkess & Salter LLC at (303) 531-5380.
Chapter 7 Bankruptcy Attorney
The trustee can really do as they please. However generally the look back 2-5 years depending on the case itself. If there was real estate or if there were some assets at some time; then they will look back longer.
Selling a business in 1987 (presumably, just the assets) and then continuing to keep the name (which apparently has some value since it is listed on your returns) is a little odd and should bring some questions from the trustee. However, all the trustees tend to focus on with businesses is whether there are any undisclosed assets that represent personal wealth that should come into the bankruptcy estate. If there are no assets and thus no value subject to disgorgement, I doubt the trustee in your case would be too concerned with pursuing the matter further.