BK but house was short sale, 1099-C, am I hosed?

[HopelessInWA]

I just got a 1099-C from the short sale of our home last year. While we did file BK, the house was not part of the BK and it says "NO" on the 1099-C under "Bankruptcy".

Is there any way around this, or am I now on the hook for a $28K debt cancellation?

[helpmeout]

They completed the 1099-C incorrectly.

All debt, including the mortgage, was part of the BK. All you do is send a copy of your discharge with your tax return.

[NoMoreCards]

All debts must have been included in bk. We can not pick and choose. So was short sale before you filed?

[HopelessInWA]

The short sale was not part of the BK.

The house was for short sale during the time we filed BK and didn't actually sell until after our BK was discharged. We put the house for sale in March 2010. BK was filed July 2010 and discharged in November 2010. The house finally sold in August 2011.

[NoMoreCards]

So house had to be included in bk filing. Legally, you can not just leave it off. I would send a copy of the discharge along with the 1099-c when you file taxes. You will not have to pay taxes on this. If you are still uneasy about this, call the attorney that you had file the bk.
You could also google "leaving debts out of bankruptcy".

[keepmine]

I agree you have no tax liability.
But, you need to include IRS form 982 with your tax return.