Reporting net operating loss as asset in bankruptcy?

[chris7]

What is the name of your state?TX

I have recently read the IRS pub 908 "Tax consequences of bankruptcy" and learned that tax atributes like capital losses and net operating losses belong to the bankruptcy estate. We filed BK in 04 and on our 03 return we showed both a net operating loss and a capital loss. Where were we supposed to report or list this on our bankruptcy paperwork? We did not try to hide it, the trustee has all our tax returns, but we also did not list it anywhere on the paperwork because it was not mentioned in any of the BK books I read or by our BK attorney. Do we need to go back and amend the petition and list it anywhere? I know, I know, ask our attorney, and I will, but with the long weekend thats 3 days away. Does anyone know the answer before then?

 

[Ladynred]

I know next to nothing about taxes, but don't the losses go against the income reported for that tax year ?? I don't think that qualifies and an asset unless you got a whopping cash refund and if you did the Trustee might have asked about it.

 

[chris7]

As I understand from the reading I've done, the trustee can use a debtors net operating loss (nol) and carry it back to a prior tax year and amend the debtors tax form and get a refund. I was clueless about this until I happened to read the irs pub. while gearing up for this years taxes. Now I'm wondering if we were supposed to report this somewhere. You are allowed to carry back losses for two years and I looked at our tax forms for those years and there is money the trustee could get back. We are nearing the end of our asset case. The trustee has filed his final report before distribution and gotten approval to pay himself. I've read so many books and websites about bankruptcy and I've never heard of reporting a nol on the paperwork before. I went back and looked at all our paperwork and there is nowhere I can see where it could or should have been reported. What seems like the right thing to do (spiritually at least) is tell the trustee that there is a chunk of money he could recover from the IRS for our creditors. At the same time he has the tax return and the NOL is listed on the first page of our 2003 return in black and white. I guess this is kind of obscure stuff and maybe he's not real up to date on it but it feels like I'd be trying to do his job for him to go back and point this out. I don't know. I'm reluctant to contact our attorney because he was kind of a bonehead from start to finish not particulary well informed about BK for a BK attorney.

 

[Ladynred]

My take on this - if the Trustee has copies of your tax returns and has said nothing to you about this - leave it alone.