How to Read IRS Tax Guide for Bankruptcy, Publication 908 (02/2020) RTF
What’s New Bankruptcy estate filing threshold. For tax year 2019, the requirement to file a return for a bankruptcy estate applies only if gross income is at least $12,200. This amount is equal to the standard deduction for married individuals filing a separate return and is generally adjusted annually. See the Instructions for Form 1041 for updates to the filing threshold amount for future yearsReminders Net operating loss. For tax years ending after 2017, only NOLs generated from certain farming losses can be carried back. See Pub. 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts, and Pub. 225, Farmer's Tax Guide for more information. Automatic 6-month extension of time to file a bankruptcy estate return. An automatic 6-month extension of time to file a bankruptcy estate income tax return is available for individuals in Chapter 7 or Chapter 11 bankruptcy proceedings upon filing a required application. Bankruptcy Code tax filing requirements. Debtors filing under chapters 7, 11, 12, and 13 of the Bankruptcy Code must file all applicable federal, state, and local tax returns that become due after a case commences. Failure to file tax returns timely or obtain an extension can cause a bankruptcy case to be converted to another chapter or dismissed. In chapter 13 cases, the debtor must file all required tax returns for tax periods ending within 4 years of the filing of the bankruptcy petition. Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children (NCMC). Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.Introduction This publication isn't intended to cover bankruptcy law in general, or to provide detailed discussions of the tax rules for the more complex corporate bankruptcy reorganizations or other highly technical transactions. Additionally, this publication isn't updated on an annual basis and may not reflect recent developments in bankruptcy or tax law. If you need more guidance on the bankruptcy or tax laws applicable to your case, you should seek professional advice. This publication explains the basic federal income tax aspects of bankruptcy. A fundamental goal of the bankruptcy laws enacted by Congress is to give an honest debtor a financial “fresh start”
