If the owner rents his property (until it goes to auction) that was surrendered under Ch7 does he show the rental income. Can they claim the property depreciation on taxes?
I see no way to omit the rental income earned and as long as you own the asset placed in service as a rental, you can claim depreciation. You really should see a CPA when you do your taxes because you are also likely to encounter forgiveness of debt income and need to consider the federal and state tax implications.
Still trying to understand. Owner is also waiting to hear from accountant.
So Owner is still on Title on these properties that were surrendered in Ch7; lender has to foreclose to get properties back. If say Ch7 was discharged in May 2010 and properties foreclosed in Oct 2010 how long/ how much depreciation does owner claim?
When does the lender send 1099? when Ch7 is discharged or when they foreclose?
Quote:
On 2010-12-14 13:26, NewKidInTown3 wrote:
There is no tax on debt cancelled as a result of bankruptcy.
I agree assuming that the debt is discharged in BK. I have seen situations where not all assets/liabilities were included in BK filing....but I should have stated that.
I see no way to omit the rental income earned and as long as you own the asset placed in service as a rental, you can claim depreciation. You really should see a CPA when you do your taxes because you are also likely to encounter forgiveness of debt income and need to consider the federal and state tax implications.
There is no tax on debt cancelled as a result of bankruptcy.
NewKid is spot on. Exclude bankruptcy debt by completing the relevant sections on form 982.
Still trying to understand. Owner is also waiting to hear from accountant.
So Owner is still on Title on these properties that were surrendered in Ch7; lender has to foreclose to get properties back. If say Ch7 was discharged in May 2010 and properties foreclosed in Oct 2010 how long/ how much depreciation does owner claim?
When does the lender send 1099? when Ch7 is discharged or when they foreclose?
Thanks
[ Edited by SKrei on Date 12/15/2010 ]
Quote:
On 2010-12-14 13:26, NewKidInTown3 wrote:
There is no tax on debt cancelled as a result of bankruptcy.
I agree assuming that the debt is discharged in BK. I have seen situations where not all assets/liabilities were included in BK filing....but I should have stated that.