bankruptcy and 1099C

[taxmom34]

bankruptcy and 1099C,

my brother just called me from CO, he filed bankruptcy in june 2011, today received a 1099 for forgiveness of dept on duplex his ex wife owns ($100,000) his name was on deed when he filed bankruptcy but she got the duplex with divorce .
i have never dealt with this and am wondering why he got 1099? why do people file bankruptcy if the forgiven debt is reported on a 1099 to report on their tax return and owe the IRS ?
i told him to speak to his lawyer that filed the bankruptcy, and i would see if i could find some more info .
any help here to make me understand would be appreciated

[ardi600]

you may

have to file form 982 along with his return.

[kpangelinan]

Debt that is forgiven is taxable income, but is exempt under certain conditions....like already mentioned, see form 982. Bankruptcy is one of them.

[S T]

Agree with some of the prior posts, maybe Pub 4681 might be good to review

there are some other really good threads on this board as well - try a search and review and then maybe some more specifics if there are more questions.

The 1099A-1099C is another issue we are dealing with as practitioners.


Sandy