What is a 1099?
Debts that are canceled by banks or other financial institutions are considered reportable income by the IRS. After a foreclosure, for example, the amount that was forgiven by the lender may be reported. If you have received a 1099 stating that debt has been canceled, you may be rightly wondering how you will pay for the taxes on this “income.”
Fortunately, you have options. At the law firm of Rothschild & Ausbrooks, in Nashville, we can help you explore these options and the important exceptions that exist for the cancellation of debt. Be sure to bring a copy of the 1099 to any consultation so that your lawyer will have a thorough understanding of the problem.
Experienced Tennessee Tax Debt and Bankruptcy Attorneys
If the IRS has sent you a notice claiming that you owe tax, since a 1099 was filed by a creditor, it is important to respond immediately. If you filed a bankruptcy and the debt was canceled, you should owe no tax. If you are filing taxes after bankruptcy and have questions, our attorneys can help. In that case, we will help you send IRS a copy of your discharge notice and follow up with it to make sure that the letter was received within the time allowed.
In other cases, we will help you understand how to respond and what else you can do to limit your exposure to this tax debt.
Contact Us for a Free Bankruptcy Consultation
Please contact a Nashville bankruptcy attorney at Rothschild & Ausbrooks, PLLC, today to learn more about deficiency judgments in Tennessee.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.