I was sued for foreclosure and filed bankruptcy. My bankruptcy is discharged and the property was foreclosed and sold. I have now received a 1099-C. I live in Florida and it was vacant land. Since the debt was in the bankruptcy, am I liable for the taxes now? Principal balance was $59,000 and fair market value was $39,000 when sold. If liable for taxes, do I only pay tax would it just be tax on the difference of $20,000.