I filed for Chapter 7 bankruptcy last year. However, I didn't receive a Form 1099-C and Form 882. How do I report the bankruptcy on my return?
Filing Chapter 7 bankruptcy creates a bankruptcy estate. A bankruptcy estate is a taxable entity separate from you. If you exclude cancelled debt from your gross income, you must apply it to the bankruptcy estate as a reduction in tax attributes.
The trustee of the bankruptcy estate decides which to do first:
- Reduce the basis of depreciable property.
- Reduce other tax attributes. Adding a Form 1099-C and Form 982, which are used as a Cancellation of Debt and Reduction of Tax Attributes, respectively, might affect your return. Contact the trustee of the bankruptcy estate or your Chapter 7 bankruptcy attorney to find out.
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So how much will you get (or owe) this year? That’s the million-dollar question. We happen to have three very useful calculators to help you estimate your refund or balance due.