Tax Impact of Debt Forgiveness

Sound Advice Regarding Taxes, Short Sales and Bankruptcy

There are three basic ways to eliminate a debt: you can pay it off over time, get it discharged through bankruptcy, or convince the creditor to forgive a portion or all of the debt. Of the three, debt forgiveness can have significant tax implications. Before you accept a short sale or negotiate a reduction in your debts, you should consult with an experienced bankruptcy attorney.

Attorney Giovanni Orantes has extensive experience in matters involving tax issues in bankruptcy and debt forgiveness. Mr. Orantes advises individuals, small businesses, real estate investors and corporations regarding the tax implications of debt forgiveness. Giovanni Orantes can provide you with the advice you need to make informed decisions.

Contact our firm today to schedule a free consultation about your legal matter.

Short Sales and Debt Forgiveness

Giovanni Orantes regularly counsels clients regarding the tax implications of short sales and other debt forgiveness arrangements. In your case, there may be debt relief alternatives such as bankruptcy that provide greater net financial benefits. 

Tax Impacts in Bankruptcy

Debts removed through bankruptcy are not considered taxable income. That is not to say though, that filing bankruptcy does not have tax implications. For example, if you own property that is taken back by the lender, you will lose any tax loss carryforwards associated with the property. While you are in Chapter 13 or Chapter 11 bankruptcy, if you sell a property at a higher price than you paid, you will owe capital gains taxes, unless you incur offsetting capital losses in another transaction. Giovanni Orantes can discuss these and other issues with you, providing the guidance you need. 

Contact a Lawyer

To schedule a free consultation about the tax implications of debt forgiveness and bankruptcy, contact Orantes Law Firm, in Los Angeles. 

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