Just before I filed for bankruptcy I settled on a credit card debt. I was still struggling with "wanting to make this problem work" that many people do before deciding on bankruptcy. When I filed it was just barely out of the 3 month period that the trustee can go back and retrieve the settlement. So here is my question. Do I have to claim as income the portion "forgiven" to which I was sent the tax form about? I have not been discharged yet, and filed in 2010. This "income" causes me $1300 in taxes that I have to pay for fed and state. Thanks for any help you can give me.
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Hi 2sad4this,
You probably don't have to include it, there are exceptions including insolvency and debts included in BK.
Go here for the details: http://www.irs.gov/pub/irs-pdf/p4681.pdf
Also think you will need this form: http://www.irs.gov/pub/irs-pdf/f982.pdf
Tom in Colo
ps: didn't check to see if those were the most current forms, see if the IRS has a more current versionCh7 filed 5/12/2010.....341 meeting 6/30/2010....report of no distribution 8/15/2010.....discharged 10/01/2010.....closed 11/09/2010
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