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Updated about 4 years ago on . Most recent reply

Daniel E.'s profile image
Daniel E.'s profile image
Daniel E.
  • from Charlotte, NC
  • Member since Apr 23, 2018
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55
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Daniel E.'s profile image
Daniel E.'s profile image
Daniel E.
  • from Charlotte, NC
  • Member since Apr 23, 2018
Connect
Daniel E.
  • Charlotte, NC
4
Votes |
55
Posts
Tax Liens & Mortgage Notes

Owe taxes on bankruptcy payments received?

Daniel E.
  • Charlotte, NC
Posted

Hello,

I own one non-performing note. Chapter 11 plan was approved in early 2020. Do I need to report this income? Will I owe taxes?


UPB: $50k

Legal: $85k

2020 Pmts: $15k*

LLC costs related to note (force-placed insurance, legal bills, interest): $12k.

* the vast majority of the payments went to pay the costs of getting to an approved plan. Going forward, they will actually reduce my basis.

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