If you are considering a real estate short sale of your home, you should be aware that you might receive a form 1099-C for the amount of the lender's losses.
This is considered loan forgiveness in the eyes of the IRS. If you have other assets such as savings and you are not insolvent, you may end up being responsible to pay ordinary taxes on the amount of the 1099-C.
If you settle a debt with a creditor for less than the full amount owed, you may be required to report this forgiven debt as regular income, with certain important exceptions.
The forgiven debts include money owed after foreclosure or property repossession or credit accounts that you don't pay.
There are exceptions noted below:
If a lender forgives or writes off $600 or more of a debt's principal (the amount not including interest or fees) must send you and the IRS a Form 1099-C at the end of the year. When you file your tax return for the tax year in which your debt was written off, the IRS will require that you report the amount on the form as income.
Fortunately, the Obama administration passed a law stating that if you are short selling your primary residence, you may be exempt from paying taxes even if a 1099 is submitted to the IRS by the lender.
While you may not have received this form from the creditor, the creditor may have submitted one to the IRS anyway. If you don’t list the income on your tax return and the IRS has the information of the transaction on file, you could get a tax bill or, worse, an audit notice. This could end up costing you more than just the original tax bill.
There are several exceptions stated in the Internal Revenue Code. For example, you do not have to report the income on your tax return if the write off of the debt is intended as a gift, you discharge the debt in bankruptcy, or you were insolvent before the creditor agreed to settle or write off the debt. You should consult a qualified tax and legal counsel to see if these circumstances apply.
Modify Search Criteria
150 Carolinian Drive
Summerville, SC 29485
Legend Oaks Plantation
Residential
MLS# 24000209 / Active
MOTIVATED SELLER will pay 4% of Purchase Price in Closing Costs for your buyer!!!! Welcome to the beautiful Legend Oaks Community, located in the h...
Increase +$10,000
316 W Cooper Avenue
Folly Beach, SC 29439
Residential
MLS# 24000194 / Active
Island Life at its Best. 316 W Cooper is a bright and airy Classic Folly Beach Cottage. Situated 1 block off of the beach & a quick walk / bike rid...
Reduced -$76,000
2697 Ranger Drive
North Charleston, SC 29405
Waylyn
Residential
MLS# 24000183 / Active
Welcome to your beautiful fully renovated oasis at 2697 Ranger Drive in the heart of North Charleston, SC! This charming 3-bedroom, 2-bathroom home...
Reduced -$4,777
5559 Colonial Chatsworth Circle
North Charleston, SC 29418
Summers Bend On The Ashley
Residential
MLS# 24000133 / Active
Looking for a home that provides ease and function in living? This home is it. Absolutely one of the best condos for sale in Charleston. Move in re...
Reduced -$4,000
381 Rice Road
Ridgeville, SC 29472
Residential
MLS# 24000111 / Active
This mini farm has a cute brick ranch home sitting on 4 acres. It is partially cleared with a 3 stall barn that includes a tack room and a feed sto...
Reduced -$1
410 Brooks Drive
Holly Hill, SC 29059
Evergreen
Residential
MLS# 24000076 / Active
Limited time up to $23k finance incentive with builder's preferred lender and attorney. Move In Ready. This homesite offers a pond view. Welcome to...
Increase +$2,505
1489 Appling Drive
Mount Pleasant, SC 29464
Shell Point
Residential
MLS# 24000071 / Active
Location, Location, Location! This beautifully appointed southern home sits on the lake in the coveted neighborhood of Shell Point. Imagine being i...
116 Wares Run
Cross, SC 29436
Cross Subd (longpoint)
Residential
MLS# 24000020 / Active
Almost 1 acre on Lake Moultrie with a private boat ramp. Huge workshop and 2 car carport. Plenty of parking for your boat or RV. All for under $300...
Reduced -$5,000
Lane
Seabrook Island, SC 29455
Summerwind
Residential
MLS# 23028613 / Active
Nestled amongst the Carolina palm trees, this comfortable, well-appointed Summer Wind cottage is perfect for full-time or part-time living. It is a...
Reduced -$20,000
451 Green Fern Drive
Summerville, SC 29483
Hampton Woods
Residential
MLS# 23028551 / Active
NEW CONSTRUCTION! FULLY SPEC'D OUT HOMES! Price INCLUDES: structural and design options, base pricing and lot premiums! List Price Reflects Incenti...
Increase +$5,000
455 Green Fern Drive
Summerville, SC 29483
Hampton Woods
Residential
MLS# 23028550 / Active
NEW CONSTRUCTION! LIST PRICE INCLUDES: STRUCTURALS,DESIGN OPTIONS, BASE PRICING, LOT PREMIUM.List Price Reflects Incentive! Incentive tied to the u...
Increase +$5,000
459 Green Fern Drive
Summerville, SC 29483
Hampton Woods
Residential
MLS# 23028549 / Active
NEW CONSTRUCTION! LIST PRICE INCLUDES: STRUCTURALS, DESIGN OPTIONS, BASE PRICING, LOT PREMIUM. List Price Reflects Incentive! Incentive tied to the...
Reduced -$3,577
463 Green Fern Drive
Summerville, SC 29483
Hampton Woods
Residential
MLS# 23028548 / Active
NEW CONSTRUCTION! LIST PRICE INCLUDES: STRUCTURALS, DESIGN OPTIONS, BASE PRICING, LOT PREMIUM. List Price Reflects Incentive! Incentive tied to the...
Increase +$5,000
387 Green Fern Drive
Summerville, SC 29483
Hampton Woods
Residential
MLS# 23028544 / Active
NEW CONSTRUCTION! FULLY SPEC'D OUT HOME! PRICE INCLUDES: structural and design options, base pricing, lot premium! List Price Reflects Incentive! I...
Increase +$5,000
383 Green Fern Drive
Summerville, SC 29483
Hampton Woods
Residential
MLS# 23028542 / Active
NEW CONSTRUCTION! FULLY SPEC'D OUT HOMES! Price INCLUDES: structural and design options, base price and lot premium! List Price Reflects Incentive!...
Increase +$500
375 Green Fern Drive
Summerville, SC 29483
Hampton Woods
Residential
MLS# 23028536 / Active
NEW CONSTRUCTION! FULLY SPEC'D OUT HOMES! Price INCLUDES: structural and design options, base pricing and lot premiums! List Price Reflects Incenti...
Increase +$5,000
371 Green Fern Drive
Summerville, SC 29483
Hampton Woods
Residential
MLS# 23028533 / Active
NEW CONSTRUCTION! List Price Reflects Incentive! Incentive tied to the use of Seller's preferred lender and closing attorney. See agent for details...
Increase +$5,000
131 Whaler Avenue
Summerville, SC 29486
Cane Bay Plantation
Residential
MLS# 23028514 / Active
Discover modern luxury in this meticulously maintained 2019-built home nestled in the prestigious West Lake subsection of Cane Bay Plantation. Boas...
Reduced -$8,000
174 Thomas Kate Road
Dorchester, SC 29437
Residential
MLS# 23028480 / Active
UNDER CONSTRUCTION! NO HOA!! READY MAY 2024!!The Jasper floor plan is designed to make every square foot count. The kitchen boasts a full walk-in c...
6500 Parkers Ferry Road
Adams Run, SC 29426
Residential
MLS# 23028457 / Active
Discover the extraordinary Longwing Plantation, a 1032-acre haven of natural beauty and outdoor adventures. This stunning property features over 85...
Reduced -$8,075,000
924 First & Peake Street
Holly Hill, SC 29059
Residential
Reduced -$31,000
The data relating to real estate for sale on this web site comes in part from the Broker ReciprocitySM Program of the Charleston Trident Multiple Listing Service. Real estate listings held by brokerage firms other than EXP Realty LLC are marked with the Broker ReciprocitySM logo or the Broker ReciprocitySM thumbnail logo (a little black house) and detailed information about them includes the name of the listing brokers. Last updated on 05-19-2024 11:53 PM EST .
The broker providing these data believes them to be correct, but advises interested parties to confirm them before relying on them in a purchase decision.
Copyright 2024 Charleston Trident Multiple Listing Service, Inc. All rights reserved.