Are you taxed on the amount that is discharged?

[azpt22]

We owe sales tax from a business and credit cards? If the credit cards are discharged do we get taxed on that as if it was income in a ch 7?

[justbroke]

No, you are not taxed on anything discharged. Even if you are accidentally sent an IRS Form 1099, you just complete an IRS Form 982 indicating that the debt was discharged in a Bankruptcy. That simple.

As for your business taxes, those may not be dischargeable. Check with your attorney on discharging them. Usually, discharging a tax might require the filing of a complaint to determine dischargeability.