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.
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2 Eagleview Drive
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023021 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
7 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023019 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
6 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023017 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,000
5 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023016 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
4 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023015 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
3 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023014 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
2 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023012 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
1 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023008 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
14 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023006 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
13 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023005 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
12 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023002 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
11 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023001 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
9 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23023000 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
10 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23022999 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
8 Opal Wing Street
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23022996 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
Increase +$1,500
1 Eagleview Drive
Moncks Corner, SC 29461
Foxbank Plantation
Residential
MLS# 23022995 / Active
INCENTIVE!!! (TIED TO PREFERRED LENDER / ATTORNEY) SPEND $35,000 IN UPGRADED OPTIONS: RECEIVE $20,000 OFF & $5K IN CLOSING COSTS. PLUS THROUGH END ...
9 Eugenia Avenue
Kiawah Island, SC 29455
Kiawah Island
Residential
MLS# 23022922 / Active
Welcome to breathtaking tranquility. This stunning custom-built home with its family style layout allows for function and elegance. Feel the majest...
Reduced -$2,000,000
1849 Hazelwood Drive
Charleston, SC 29407
Orleans Woods
Residential
MLS# 23022855 / Active
Opportunity Knocks! Welcome to this large 4 bedroom, 2 and a half bathroom gem, boasting an impressive 2,222 square feet of living space. This home...
4385 Ten Shillings Way
Ravenel, SC 29470
Poplar Grove
Residential
MLS# 23022840 / Active
Discover a lifestyle where your home becomes your personal retreat, presenting a distinguished opportunity to own a remarkable residence set upon 1...
Reduced -$50,000
3213 Middle Street
Sullivans Island, SC 29482
Sullivans Island
Residential
MLS# 23022835 / Active
Ultra high-end collaboration between Phillip Smith Contractors and Steve Herlong Architects. The property is ideally situated to capture the stunni...
487 Old Dock Road
Kiawah Island, SC 29455
Middlewoods East
Residential
MLS# 23022743 / Active
Surrounded by majestic oaks on a spacious corner lot in West Beach Village, 487 Old Dock Road offers a peaceful sanctuary, nestled in one of the is...
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