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TAX ASPECTS OF DECLARING BANKRUPTCY |
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Bankruptcy proceedings begin with the filing of a petition with the bankruptcy court. The filing of the petitions creates a bankruptcy estate, which generally consists of all the assets of the person filing the bankruptcy petition. A separate taxable entity is created if the bankruptcy petition is filed by an individual under chapter 7 or chapter 11 of the Bankruptcy Code.
The tax obligations of the person filing a bankruptcy petition (the debtor) vary depending on the bankruptcy chapter under which the petition was filed.
Generally, when a debt owed to another is canceled the amount canceled or forgiven is considered income that is taxed to the person owing the debt. If a debt is canceled under a bankruptcy proceeding, the amount canceled is not income. However, the canceled debt reduces the amount of other tax benefits the debtor would otherwise be entitled to.
This information is not intended to cover bankruptcy law in general, or to provide detailed discussions of the tax rules for the more complex corporate bankruptcy reorganizations or other highly technical transactions you should contact a tax attorney.
The above information is from the Internal Revenue Service and represents general legal advice. Since the law is continually changing, some provisions may be out of date. It is always best to consult an attorney about your legal rights and responsibilities regarding your particular case. Please Contact Us by using the Quick Contact form, calling us at (904) 823-3333 or (386) 366-4848, or by email at info@jacksonlawgroup.com.
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PRACTICE AREAS:
• Tax Law & IRS Defense
• Bankruptcy & Asset Protection
• Wills, Trusts, Estates - Planning & Administration
• Condo & Homeowner Association Law
• General Practice Law Firm
DEFINITION OF ESTATE PLANNING:
I want to control my property while alive, take care of my loved ones and myself if I become disabled, and, upon my death, give what I have to whom I want, the way I want, and when I want. And, if I can, I want to save every last tax dollar, professional fee, and court cost possible.
Tax, Estate Planning, and Community Association Law Seminars Available
Flat Fees Available
Will & Trust Packages Available |
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(904) 823-3333 • (386) 366-4848
Email: info@jacksonlawgroup.com
100 Whetstone Place, Suite 101
St. Augustine, Florida 32086
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