Can I Still Use the Mortgage Deduction On Taxes If My House is Being Paid In A Chapter 13 Bankruptcy?

Jul 14, 2014 No Comments by

Laptop KeyboardAfter filing Chapter 13 bankruptcy, you should confirm with your attorney whether the monthly mortgage payment is to be paid by you or the Chapter 13 bankruptcy Trustee.  Often the mortgage payment is included in your monthly Chapter 13 payment and disbursed to the mortgage company by the Chapter 13 Trustee.    Regardless of how the monthly payments are made to the mortgage company, you are eligible to deduct interest paid on your loan if you itemize your deductions on your tax return, and the mortgage interest meets the requirements established by the Internal Revenue Service.   The same holds true if the property insurance and taxes are escrowed in your mortgage payment or whether you pay them directly to your insurance agent and city and county tax collector.  They should be eligible for deduction on your taxes.

The mortgage company should continue to send you the Form 1098 Mortgage Interest Statement which will list the mortgage interest, insurance premiums and real estate taxes paid to them for the tax year.  This will only include taxes and insurance if they were escrowed in your monthly payment.  If you do not receive Form 1098 by early February following the tax year, you should contact the mortgage company and request they send the form to you.  The information on Form 1098 is the same information the mortgage company provides to the Internal Revenue Service regarding your loan.

After You File, Bankruptcy, Chapter 13, Duncan Law Blog, Taxes
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