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If you file bankruptcy do you owe income tax on the amount of debts that were discharged?

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This is an intriguing question considering that the IRS does consider forgiven debt to be income normally. However, I have never seen the IRS pursue any of my clients for income taxes due to forgiven debt in bankruptcy. I stay as far away from the Tax Code as possible, though the answer may lie in there.Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
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When filing bankruptcy do they take your income tax?

  This question has been discussed many times here..and there seems to be no hard and fast rule. Certainly, it depends on several things. Most importantly, is what perio

Is bankruptcy discharged debt considered taxable income?

No, discharge of debts through bankruptcy do not create taxable earned income. However, you can have Capital Gains or Losses if any real-estate was disposed in that bankruptcy

If bankruptcy is filed and federal back taxes are owed do you still have to pay them?

Yes, as a general rule.   Taxes of all kinds are not discharged by the bankruptcy process.   That means, when it's all over with bankruptcy, you still owe taxes to the f

If a tax debt is owed to the IRS can filing bankruptcy settle this debt and allow you to start over?

Yes you can start over but this does have an extreme barring on your credit. You can include the years prior to three years from the tax year you owed the IRS. However any yea

What if any are the tax inplications of debt discharged in a chapter 7 bankruptcy?

Chapter 7: This chapter of bankruptcy law provides for a full liquidation of an entity's non-exempt property to satisfy creditors, and discharges all dischargeable debts  

What debt cannot be discharged by bankruptcy?

All unsecured Debt may be discharged in chapter 7,(credit cards, personal loans, and others) secured debts (such as car loans and mortgage), and other assets will be taken by

Do you pay taxes on debt discharged in bankruptcy?

Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve: Qualified principal residence indebtedness: This is

Can you add debts to a discharged bankruptcy?

In a Chapter 7 case, one can normally reopen a bankruptcy to add a creditor as long as the debt was incurred before the bankruptcy case was filed and the debtor simply forgot

If a tax debt is owed to the IRS can filing bankruptcy settle this debt even with a lien?

Also keep in mind that liens are not released until the liability is paid in full regardless of the amount was dissolved by the bankruptcy.   If you file Offer In Compromis

What types of debt is not discharged in bankruptcy?

Q: Are all of the debtor's debts discharged, or only some? A: Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. The Code speci
In Liens

What form do you need to file to have a lien removed after the debt has been discharged in bankruptcy?

 Answer   A debtor who wishes to reopen a closed bankruptcy case to remove a lien normally has to first file a Motion to Reopen the bankruptcy case with the Bankruptcy