We are 1 year into our chapter 13 case. We just made our 12th payment!!! We are still in our primary home and our rental home tenants have stopped paying rent. Our attorney had informed us that we could always add our investment home into our bankruptcy. Here are my questions:
1. Would we be responsible for taxes on the gain of the house?
2. Would we be required to pay back depreciation recapture?
We have used the house as a rental for 10 years. Before that it was a primary residence. We have taken about $2500/yr depreciation ($25,000 in the 10 yrs).
The house is upside down and it is costing us every month to rent it and the stress of the renters not paying is about to drive me mad. I do not want to let it go into foreclosure though if we will end up with a huge tax bill in a year or two. I would like to just get the fresh start that we wanted from our chapt. 13.
What advice do you have as far as how to approach this? I cannot find too much info on the depreciation recapture during a chapt. 13. Thanks in advance for the help.
1. Would we be responsible for taxes on the gain of the house?
2. Would we be required to pay back depreciation recapture?
We have used the house as a rental for 10 years. Before that it was a primary residence. We have taken about $2500/yr depreciation ($25,000 in the 10 yrs).
The house is upside down and it is costing us every month to rent it and the stress of the renters not paying is about to drive me mad. I do not want to let it go into foreclosure though if we will end up with a huge tax bill in a year or two. I would like to just get the fresh start that we wanted from our chapt. 13.
What advice do you have as far as how to approach this? I cannot find too much info on the depreciation recapture during a chapt. 13. Thanks in advance for the help.
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