Since I filed bankruptcy, will It be best for me to file short form as I did before or is it better for me to have a tax preperation company file long form? I'm not sure if filing long form is beneficial. We have one child as a dependant.
2007-01-01 22:35:49 · 7 answers · asked by moose on the loose 3 in Business & Finance ➔ Taxes ➔ United States
Filing for bankruptcy won't change the way you file for taxes. However, if you own a home, have retirement account(s), and/or get alimony and child support, you will have to use the long form. Since there are new tax law(s) you might want to have some prepare your long form.
2007-01-01 22:48:20 · answer #1 · answered by stiletto 4 · 0⤊ 0⤋
Debt forgiveness is considered income. If someone cancels your debts, you have to record as income everything that was canceled.
You are exempted from this rule when you become bankrupt or insolvent (when your debts value more than your assets). Completion of bankruptcy will satisfy exemption. You equally have no income or deductions as a result of bankruptcy.
However here are some limitations that might apply to you. You have to take the total amount of your forgiven debts and subtract out the following amounts if you have not completed bankruptcy:
1) Net operating losses if you own a business, they're no longer deductible.
2) General business credit carryovers
3) Minimum tax credits
4) Capital loss carryovers
5) Basis in property involved in bankruptcy might be adjusted
6) Passive activity losses and carryovers (a passive activity is an investment that you don't actively participate in managing)
7) Foreign tax credit carryovers
All of these are adjusted in the order given until your credit runs out. Without the completion of bankruptcy, any amount of your forgiven debts left over after all seven of these adjustments becomes taxable income.
2007-01-02 07:05:39 · answer #2 · answered by Anonymous · 1⤊ 0⤋
It'll be the same.
Go ahead and just file the short form.
You might want to check out Turbo Tax, they may have some tips for you to save some money. You can get both state and fed. tax programs on line, it's cheap and easy.
2007-01-02 06:46:12 · answer #3 · answered by Rich 3 · 0⤊ 0⤋
Your bankruptcy shouldn't not impact what tax return form you use. A CPA or a qualified tax return preparer should be able to advise you if it is better to itemize your deductions or not.
2007-01-02 14:29:18 · answer #4 · answered by Carl 7 · 0⤊ 0⤋
Not at all. Taxes are forever.
2007-01-02 06:45:18 · answer #5 · answered by mackjcsf 2 · 0⤊ 0⤋
it shouldnt
2007-01-02 06:36:38 · answer #6 · answered by Chicago Girl 4 · 0⤊ 0⤋
No, it won't.
2007-01-02 06:36:52 · answer #7 · answered by Anonymous · 0⤊ 0⤋