[CLBS] debt forgiveness tax question

[D. Blair Clark]

DISCHARGED debt in a BK (Ch. 11 or 7) is not taxable anyway.  13 and 12 are
different.  But I'd suggest you object to their proposed assessment and send
them a copy of the BK discharge and show them the debt was listed.  We have
that issue come up and that almost always works without further question.
The discharge trumps the 1099.  

D. Blair Clark
LAW OFFICES OF D. BLAIR CLARK PC
1513 Tyrell Lane, Suite 130
Boise, ID 83706
Telephone:    (208) 475-2050
Fax:               (208) 475-2055



-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Catherine
Dullea
Sent: Thursday, March 12, 2015 10:16 AM
To: CLBS at admws.idaho.gov
Subject: [CLBS] debt forgiveness tax question

Dear Listmates:

I was under the impression that the feds had instituted a moratorium against
considering debt forgiveness as income for taxing purposes for the last few
years.  I filed a chapter 7 for some clients last year.  We listed a Chase
debt.  Evidently Chase charged off the debt and sent them a 1099 for the
year 2013.  Now the IRS wants $615 in taxes regarding the cancellation of
debt.  Any wisdom?

--Katie Dullea

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