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Bankruptcy and Taxes
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Flashcards
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Income Taxes
Income taxes may be dischargeable if certain conditions are met, such as the tax being due at least three years before filing for bankruptcy, and the tax return having been filed at least two years prior to the bankruptcy filing.
Business Taxes
Business taxes, depending on whether they are income taxes, payroll taxes, or some other type, have varied dischargeability in bankruptcy.
Sales Taxes
Sales taxes are generally not dischargeable in bankruptcy as they are trust fund taxes collected by a retailer from customers.
Property Taxes
Property taxes may be dischargeable if they are more than one year old at the time of the bankruptcy filing. However, a lien that the tax authority has placed on the property will generally survive the bankruptcy.
Tax on Purchase or Sale of Property
Taxes incurred from the purchase or sale of property may be dischargeable depending on whether the tax is deemed a property tax or if it's assessed in relation to the gain or loss on the transaction.
Capital Gains Taxes
Capital gains taxes resulting from the sale of assets can potentially be discharged in bankruptcy if the tax debt meets the timing criteria similar to income taxes.
Estate Taxes
Estate taxes are typically not dischargeable in bankruptcy as they are associated with the transfer of wealth upon death.
Self-Employment Taxes
Self-employment taxes are typically not dischargeable in bankruptcy since they represent Social Security and Medicare taxes for self-employed individuals.
Luxury Taxes
Luxury taxes, which are a form of excise tax, may be dischargeable under circumstances similar to other excise taxes, if the timing criteria are met.
Foreign Taxes
The dischargeability of foreign taxes in U.S. bankruptcy proceedings is complex and can depend on international tax treaties and the kind of tax involved.
Employment Tax
Employment taxes that a business owes for its employees are generally not dischargeable in bankruptcy.
Fuel Taxes
Fuel taxes are a type of excise tax and their dischargeability in bankruptcy is dependent on timing and the nature of the tax.
Excise Taxes
Excise taxes may be dischargeable if they meet specific time-related criteria similar to income taxes.
Recent Tax Penalties
Tax penalties related to recent tax debts generally are not dischargeable, especially if they pertain to events that occurred within three years before filing for bankruptcy.
Sin Taxes
Sin taxes on items like alcohol and tobacco are also a form of excise tax, and their dischargeability in bankruptcy can be contingent on the timing of the tax assessment and filing.
Alternative Minimum Tax (AMT)
AMT liabilities may be dischargeable in bankruptcy under conditions similar to income tax, if the debt meets the specific time-related requirements.
Gift Taxes
Gift taxes are not usually dischargeable in a bankruptcy because they apply to the transfer of wealth during a person's lifetime.
Fraud Penalties
Tax penalties related to fraud are not dischargeable in bankruptcy due to the nature of the conduct involved.
Student Loan Related Taxes
Taxes that are the result of forgiven student loan debt may have dischargeability nuances, which can depend on specific qualifications under the Tax Code.
Payroll Taxes
Payroll taxes are not dischargeable in bankruptcy since they are considered trust fund taxes that the employer holds in trust for the government.
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