Client filed Chapter 13 bankruptcy in 2020. Had a professional practice, a single member PLLC. The business was closed prior to 2020 and it did not have any income or expenses in 2020.
I have no experience in this area but from reading IRS Publ. 908, the client is to file Form 1040. The publication states to not include any income from debts canceled due to the debtor's bankruptcy. If the debtor has any losses, credits or basis in property that were previously reduced as a result of canceled debt, these reductions must be included in the debtor's tax return.
Any other income or deductions are reported like a year prior to the year of bankruptcy.
I would appreciate any corrections and/or suggestions.
I have no experience in this area but from reading IRS Publ. 908, the client is to file Form 1040. The publication states to not include any income from debts canceled due to the debtor's bankruptcy. If the debtor has any losses, credits or basis in property that were previously reduced as a result of canceled debt, these reductions must be included in the debtor's tax return.
Any other income or deductions are reported like a year prior to the year of bankruptcy.
I would appreciate any corrections and/or suggestions.