1099 Issued After Bankruptcy: Taxable Income

22 Jul 1099 Issued After Bankruptcy: Taxable Income

If you receive a 1099 from a creditor after you file bankruptcy, IRS Form 982 will help you out. Forgiven debt is considered income to a borrower, since it is money that (theoretically) was given to the borrower but not returned. If someone files for bankruptcy and the debt was included and discharged, it should not be taxed.

IRS Form 982 “Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)” advises the Internal Revenue Service that the debt that was included in a bankruptcy.

See also: Tax Time & the Discharge of Debt by Cathy Moran, and Settlements, DMPs and Form 982, Part 3 by Gene Melchionne

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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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