Chapter 7 Bankruptcy

by Stephen Kass on October 11, 2012

Chapter 7 Bankruptcy is the easiest and the most common type of a bankruptcy proceeding which allows you to get a fresh start in your financial life. 

Usually filed by people who do not have substantial assets and are not able to keep up with minimum payments on their credit cards. The process from “soup to nuts” will take you about three months.
It starts with an interview which you can have over the phone with one of the attorneys in the office or you can schedule an appointment in one of our offices for a free consultation. After the interview we will file your case with the court. In a month after the filing, an attorney will attend a meeting of creditors ( 341 meeting) with you. Three months after the meeting you will receive an official discharge notice from the court.
Chapter 7 Bankruptcy allows you to keep all of your possessions which are under the exemption limits, which are: $2,500 in a bank account, $50,000.00 homestead exemption (amount of equity in the house), a car valued at $ 2,400.00, and $5,000.00 in personal possessions.
Our office is also competent to consult you on tax issues within bankruptcy and the ways you can discharge taxes to Internal Revenue Service and New York State.

Per New Bankruptcy Law

  1. Must get credit counseling before filing.
  2. Must get debtor education after filing.
  3. Must supply PayStubs and/or income verification up to 6 months prior to filing.
  4. Must provide tax returns filed for the past 2 years.
  5. If own secured property, must file with the court within 30 days, a statement of intention regarding re-affirming the secured debt or not. If the debtor chooses not to re-affirm the debt within 45 days of filing, then the automatic stay is terminated.
  6. Must pass Means Test.
  7. Cases are now subject to random US Trustee Audit.
  8. There is now a 8 year time limit after filing a prior chapter 7 in order to file a current one & there is now a 4 year time limit after filing a prior chapter 13 to file a current chapter 7.

For a free consultation contact  our office at  212 – 843-0050

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New Mark to Market Rule for “Securities Dealers”

by Stephen Kass on October 10, 2012

The Revenue Reconciliation Tax Act of 1993 (“the Act”) enacted on August 10, 1993 includes a new provision (Internal Revenue Code Section 475) requiring mark to market tax accounting for all dealers in securities. This provision is effective for tax years ending on or after December 31, 1993.

The new provision will require that inventories of securities, which are not investments, be valued at fair market value. If the security is not inventory, the dealer must recognize gain/loss as if the security was sold for its fair market value on the last business day of the taxable year. A hedge may or may not fall under these rules depending on the hedging instrument and the type of transaction. For subsequent dispositions, taxpayers must adjust the basis in securities to reflect the gain or loss previously recognized under the mark to market rules. Certain statutory exceptions are available for non-inventory dealer securities.

Taxpayers Affected by Section 475
The mark to market rules apply to “securities” held by a “dealer”:
(1) Dealer- a dealer in securities is any taxpayer who:

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Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

October 9, 2012

President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 into Law on April 20, 2005. Most of the provisions of this new act will come into effect in180 days after the day of enactment. Thus, October 17, 2005 is the effective date for the new law. Our Office prepared an informative […]

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French Investment in US Real Estate

October 7, 2012

Initial inquiry For U.S. tax purposes, the result will depend on whether the entity is deemed to be a partnership or a corporation. Partnership analysis If the entity is a partnership, then rental income and expenses will be effectively connected with a U.S. trade or business, or in any case, the individual partners should make a protective “net […]

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Like Kind Exchange with Assumption of Debt by Both Sides

October 5, 2012

Background Your client proposes to transfer “old” property worth $15 million with $5 million in equity ($10 million debt) for similar “new” property worth $15 million with $500,000 in equity ($14.5 million in debt). To equalize the equities, the taxpayer will receive $4.5 million in cash from the counter-party. Executive Summary As this transaction is structured, the […]

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Chapter 13 Bankruptcy

October 4, 2012

Chapter 13 Bankruptcy is created for those people who own assets which are over the exemption limits for the successful filing of a Chapter 7 or those who are in arrears on the mortgage. After you file for Bankruptcy under this Chapter you will sign a repayment plan which is to be confirmed by the Bankruptcy […]

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Chapter 11 Bankruptcy

October 3, 2012

Chapter 11 Bankruptcy is designed for Businesses that have a current and future profitable business that is worth saving and needs to reduce and restructure past debt obligations. Some of the benefits of Chapter 11 are as follows: • Payout debt up to a 6 year period. • Reduce and eliminate most tax penalties on […]

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Dealing with the Taxing Authorities in Bankruptcy Matters

October 3, 2012

NY County Lawyers Association Consumer Bankruptcy Committee Dealing with the Taxing Authorities in Bankruptcy Matters I. Tax Collection Fundamentals: Non-Bankruptcy Alternatives 1) How does an assessment come into existence? a. Tax Return Filed. When a tax return is filed showing a tax due, the IRS assesses thattax. [IRS §6201(a)]. b. Deficiency Assessment. A deficiency is […]

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Discharge of Unfiled Taxes under the Bankruptcy Abuse Prevention and Protection Act of 2005 (BAPCPA). No More “Super” Discharge?

September 15, 2012

The basic concept of a chapter 13 bankruptcy filing historically was to allow individual debtors to reorganize their finances. The policy of giving the debtor a chance to have a fresh start was foremost behind Congress’ intent to provide the debtor with a broad discharge of his/her debts incurred through false representation, fraud or recent consumer debt. […]

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Shifting the Burden of Proof

July 22, 2012

Keeping good tax records has always been important, but the IRS Restructuring and Reform Act of 1998 made it even more so. One of the act’s boldest initiatives was shifting the burden of proof from the taxpayer to the IRS in civil tax matters. The burden shift applies to both individuals and businesses. It does not, however, […]

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