We filed bankruptcy in the fall of 2018. It was just discharged January 16, 2019. Will we report this on our 2018 taxes or 2019 taxes. We haven't gotten any 1099's yet?

[suegonzo58]

Will we receive 1099-c 's if the debt was cancelled this year (2019) in Chapter 7 or will they wait until next year to issue them?

[MichaelMc]

In a Chapter 7 bankruptcy proceeding, nothing is final until the Court issues a Discharge Order. So there are no tax effects to be reported in 2018.

The good news is, you should have nothing to report in 2019 either. The discharge of debt under Title 11 of the United States Code (the bankruptcy code) is specifically excluded from the definition of income in the tax code. Your creditors know this, and most will not issue a Form 1099-C.

If you do receive a Form 1099-C from a creditor to whom your indebtedness was discharged, complete Form 982 with your 2019 tax return, checking box on line 1(a) and entering the amount on line 2. If the debt involved your principal residence, please seek advice from your bankruptcy attorney or your tax advisor.