How do I get the Tax Value Changed on my House?

Family Walking Holding HandsWhen filing a bankruptcy, one question you will hear quite often is “what is the tax value of your property?” When looking at property in a bankruptcy, whether the property is a residence, house, land or condo, the Courts tend to use the “tax value” when determining the value of the property unless there is a more accurate value determined by another means. 

In some cases, one may feel that the tax value of their property is not accurate or up to date. Someone may feel that the tax value is listed as too high, or maybe even too low. If you feel that the tax value of your property is not in line with your expectations, listed below are a few steps that can help guide you to changing the tax value of your property:

1.    Contact the county tax department to which your property is located (Ex: Mecklenburg County, Guilford County Tax Department, Davidson County Tax Department, etc.).

2.    Request a re-evaluation form from the County tax assessor within the defined county. After filling out the re-evaluation form, submit the form to the county tax department where your property is assigned.

3.    Once you have submitted the evaluation form and it has been reviewed, a tax assessor will likely come out to your property and reassess your property.

4.    If the tax assessor agrees that the tax value of your property should be changed, the Tax Department assigned to your property, once re-assessed, will send out a new tax value to your property via mail, based on the criteria they use when reassessing the property.

The value of your home is important because it will determine the best way to exempt or protect your property within a bankruptcy.

What To Do If You Get A Form 1099C After Filing Bankruptcy

Tax Date CalendarEvery year at tax time we get calls from our clients who say, “I just got a 1099C from a creditor for a loan that was discharged in my bankruptcy! What do I do now? Do I have to report it as taxable income to the IRS?”

When a creditor charges off a debt as uncollectible or has reached a settlement that releases the debtor from further obligations, he must report it to the Internal Revenue Service (IRS) as a business expense if the amount is more than $600.00. He will then send the debtor a 1099C by January 31st which the IRS considers as taxable income to the debtor. Usually, if the debtor has not filed for bankruptcy, he/she must report the discharged debt as taxable income on that tax year’s return even though he/she has not actually received the money.

However, if the debtor has filed for and/or been discharged from bankruptcy, the debtor should not incur any tax consequences for a discharged or settled debt. It is then the creditor’s responsibility to mark the “bankruptcy” box on the 1099C indicating to the IRS that the debtor has no tax liability for the discharged debt. If the creditor does not mark the bankruptcy box, the debtor can submit Form 982 with their income tax return which allows him/her to reduce his taxable income by the amount of the debt that has been discharged and thus releasing him from any income tax liability associated with the debt.

If your debts have been discharged in a bankruptcy proceeding and you receive a 1099C from a creditor you should immediately consult your experienced bankruptcy attorney who can advise you on how to file Form 982 with your income tax return.