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Taxes....BK 7...1099's


willingtocope
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willingtocope,

I too had a BK7 in 2004, with a discharged $6000 AMEX card. I have not received a 1099 from them thus far. I've personally never heard of any tax implication of a 7 discharge either.

May I request a follow-up to your post if you pursue this? I don't like the idea that they may have contacted the IRS.

Thanks in advance

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So it turns out that the answer to this is MAYBE. Technically, AMEX followed the letter of the law by issuing the 1099Cs. Basically, they're telling the IRS and putting the burden on me to sort it out.

It boils down to if the debt was CO before the BK, then the income was IIB and the 1040 that the trustee will/should file for the BK estate will deal with it. If it was post BK, then I need to get Publication 908 which explains in general gibberish how to either claim insolvency or IIB and therefore not pay taxes on it.

In reading threads on other boards I've seen some discussions between tax professionals and BK attornies debating whether this is really taxable or not. It seems your typical H&R Block type doesn't know, but an "enrolled advisor" might.

Oh yeah...I need this...thanks AMEX for making my life that much more complicated.

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The general rule is that if you were insolvent at the time the 1099-C was issued for, then you do NOT have to claim any of that as taxable income. You can't get any more insolvent than bankruptcy !! I wouldn't sweat it and I sure as hell wouldn't believe AMEX. If the debt was IIB, file the insolvency forms.

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