Bankruptcy

[elkanah1]

About a year ago I filed for bankruptcy ch. 7 and released a rental row house in Baltimore, md. The bankruptcy was successfully discharged. The mortgage bank was National City Mortgage. Today I received a form 1099-A from PNC Mortgage Services. No. 2 shows outstanding principle 47k, no. 4 shows fair market value 60k, no. 5 says "was the borrower personally liable for repayment of this debt?" and "yes" is checked.

My questions are doesn't bankruptcy release the debts if they are in the papers filed? Also, how does a rental home released at bankruptcy affect taxes?

[Gosheven]

This is pretty standard.  The 1099 is for forgiveness of debt income, so it is BECAUSE the bankruptcy discharged the debt that you are receiving that.  Per Internal Revenue Code 108, forgiveness of debt income is not includable in gross income, but it can be used to reduce certain tax attributes, such as loss carryforwards, etc.  You need to consult with a CPA or tax attorney for further tax advice.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.http://www.bklaw.com/