TidBit for Filers re: future tax returns & the May Rebate

[danaf]

I went onto lawyers.com again to ask if I filed now, could I exempt the May rebate....

Their answer (supposedly answered by an attorney) is NO!

We can only exempt the cash we have on hand at the time of filing.

Interesting. Keep in mind though - this is for NY. I don't know about other states but all the same, something to keep in mind if you are trying to decide to file now or in the near future.

[One Half Full]

I've already accepted the fact that I may lose it. Going Bk and being debt-free is worth it.

[ssdsco]

I went onto lawyers.com again to ask if I filed now, could I exempt the May rebate....

Their answer (supposedly answered by an attorney) is NO!

We can only exempt the cash we have on hand at the time of filing.

Interesting. Keep in mind though - this is for NY. I don't know about other states but all the same, something to keep in mind if you are trying to decide to file now or in the near future.

FWIW my NY attorney (a trustee) said you could use the $2500 to exempt money you're entitled to such tax refunds so I assume it would be the same for a rebate.

[danaf]

ahh - the wonderful inconsistencies of bk world.

[phoenyx]

If your 341 is before receiving stimulus payment, it could be hands off to trustee

Do not rely on the information in this post unless you discuss it with your bankruptcy attorney and clearly understand it. I am not a CPA or an attorney. This issue very well could be fought over in the courts. If I'm right, hopefully the trustees realize this on their own, or someone fights it to set a precedent for other bankruptcy filers. That being said, I'm almost certain at this time that I'm right. Whether my position would hold up is another story.

I think it is a justifiable position that the stimulus rebate is "hands off" to the trustee, if the bankruptcy's 341 meeting happens before the taxpayer receives the stimulus rebate, even if it's not covered by exemptions. This might not be easy to convince a trustee of, and might need to be decided before a judge, possibly even appealed. It might not be worth it if your attorney would charge extra.

The Economic Stimulus Act of 2008 ("ESA2008this IRS webpage which states: "If you're not eligible this year but you become eligible next year, you can claim the economic stimulus payment next year on your 2008 tax return.""No refund or credit shall be made or allowed under this subsection after December 31, 2008"

[phoenyx]

My previous post is fairly long and complicated. Anyone who wants to try to keep their stimulus rebate if their bankruptcy trustee tries taking it can download the PDF file linked below and give it to their attorney, to see if their attorney agrees with me. Anyone may also feel free to distribute the attached PDF file as long as it is not modified, including my name and email address.

If anyone uses my paper, I would love to hear about it and your results!

I tried attaching the PDF file on the forum, but am getting an error that the forum's quota is exceeded. So, it is available at:

http://sigma.homeunix.com/FederalSti...oughIn2008.pdf

Edit: Changed references to 341 meeting to bankruptcy filing, per HHM's comments. Also am hosting the PDF file at a better location than RapidShare.

[getouttathehole]

Our lawyer said that because it is actually an advance on your 2008 income taxes that it MAY not all be seizable by the trustee. That they MAY only claim the amount earned as of the day you file, so if you were to file today the trustee would be able to claim 2.5/12 of it. He said it will be a wait and see thing. Of course i hope that is how it turns out but if we lose it, we lose it.

[phoenyx]

Our lawyer said that because it is actually an advance on your 2008 income taxes that it MAY not all be seizable by the trustee. That they MAY only claim the amount earned as of the day you file, so if you were to file today the trustee would be able to claim 2.5/12 of it. He said it will be a wait and see thing. Of course i hope that is how it turns out but if we lose it, we lose it.

I agree with that interpretation, that if you file today, the trustee would be able to claim 2.5/12 of the stimulus payment, as long as they are in a district where the trustee would be able to claim the same percentage of the taxpayer's potential refund on their 2008 taxable year (which regards the return filed by April 15, 2009, and refunded a ways after that.)

I am definately going to be interested to see how this issue is resolved in different districts across the country.

[danaf]

phoenyx - while your point paper is much appreciated - honestly if I loose the rebate compared to what I'm bk'ing - I won't loose too much sleep over it. I will try to exempt it and we'll see what happens.

[phoenyx]

phoenyx - while your point paper is much appreciated - honestly if I loose the rebate compared to what I'm bk'ing - I won't loose too much sleep over it. I will try to exempt it and we'll see what happens.

I agree with you there, losing a $300-$1200 rebate is worth getting to move on with your life.

The way the stimulus rebate works just really pisses me off, because a lot of the people who need it the most won't get it, or may have it taken right away.

It also really irritates me that a certain part of the stimulus rebates might just be given to creditors through bankruptcy proceedings, where the taxpayer won't get any benefit from it. This means (probably a small) portion of the stimulus rebates is nothing more than a corporate bailout package, at the expense of our government owing foreign investors even more money. Again, note that I admit it's probably a small portion of the total stimulus rebates.

[One Half Full]

The way the stimulus rebate works just really pisses me off, because a lot of the people who need it the most won't get it, or may have it taken right away.

I think the Government wants it to move through the recipient to some business anyway (trickle-up economics). They do not want "the people" to get it, they want the businesses selling the big screen TVs to get it. That's what it is all about.

I think those who invest it in a savings bond or something like education are at least using it for themselves.

I also agree that debt freedom is worth a bit of discomfort. I am poor and cannot afford it, but easy come, easy go, it is money I never had anyway.

However, symbolically, taking the money from those who are down and out (me at least) is pretty tragic.

Someone deserves a kick in the butt.