384. Bankruptcy in a different year than the discharge

Transcript

Business Bankruptcy Update

Speaker 1 0:01

All right . Well , it's been two and a half , almost three months since the last recording . I figured I'd just update here because it's something kind of in the business acquisition world . But ever since wrapping up the gym and closing things down , we talked with our CPA and , so glad , hired an expert to do the business returns , the personal returns and all that good stuff and one of the curveballs in this whole thing we filed bankruptcy protection .

Speaker 1 0:28

Well , so we reached out to our attorney I don't know August , september , october , I don't remember but it probably took us 30 days to like get all of our papers and ducks in a row so that we could like even file for chapter seven . And then after we filed , that was in like October I want to say October or November , can't remember but then after that you go through that . It's an application process . So we had to file our petition . We had to see our bankruptcy trustee like saying , hey , here's our name and info , here's why we are applying for bankruptcy . And then she goes back and then like reevaluates and then issues her verdict after so many hearings , and that verdict was not given until the January . And so here's where it all rolls together and why it's a hiccup and it's not a problem because it's just a tension to manage , it's not a problem to solve . But we filed for bankruptcy in 2024 .

Speaker 1 1:29

Our bankruptcy was not discharged until 2025 . So when you file

Tax Complications Across Calendar Years

Speaker 1 1:34

, your credit drops , all the creditors realize they're probably not going to get paid , and so then that's where your credit just gets smashed overnight . But you don't get the financial benefit of the discharge until it's discharged by the trustee , which was until 25 . So our CPA is like hey , you legally filed in 24 , but you didn't get the reward until 25 . So technically , this is going to impact your returns because sure , it happened in one calendar year , but you didn't get the financial gain or benefit or upside until the following year . So she's saying that , from what she understands , we'll do our normal returns in 24 , like normal , but then our returns in 25 will be different , because that's when the financial benefits were received . So I don't know , I don't know how that's all going to pan out .

Speaker 1 2:23

Basically , it's middle of June and right now our bankruptcy lawyer and our CPA and the bankruptcy trustee are all on an email chain and the CPA is like hey , the legal side says this , however , the taxes say that . How do you want me to proceed Because even like right now , like the trustee said , hey , take your refund , have it mailed to the trustee and not to me , not to Nathan , um , because she gets like 80% of all the refund value . But when you file tax returns , the IRS , and like the state , they just send it to the address on file . So , like our home and it looks fraudulent if you say , hey , send the return to somebody else , not the person who's filing it , and so

Refund Logistics and Expert Confusion

Speaker 1 3:09

it's like our CPA says . It's not even like logistically possible to say , hey , here's Nathan and here's Nathan and family , here's their home address , but mail the refund to somebody else and no , this is not fraud , irs . And so I don't know . Cpa doesn't know how to proceed .

Speaker 1 3:25

Irs says one thing , department of Justice says another thing . I'm going to let the experts figure it out . So I am so glad we have a CPA and a bankruptcy attorney doing all the communications because they get to figure out all the mess . So no update as of now . Um , we have extensions and everything . We're basically waiting for the trustee to tell us . So that's the learnings If you can go bankrupt the same year , that you're going to get the discharge , if not , then you'll end up like us and you'll have to figure it out afterwards . So , anyhow , life is good , jobs are good , family's good . Um , we're going to rock and roll from there . That's it . That's where we're going . Let's rock and roll .