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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18 Photos 81 Ashley Avenue UNIT A Charleston, SC 29401

81 Ashley Avenue UNIT A
Charleston, SC 29401
Harleston Village
Residential

MLS# 24007603 / Active
2 br, 2 ba, 1646 Sqft

Experience contemporary luxury and timeless charm in this renovated Downtown Charleston home. This pied-a-terre boasts spacious living and dining r... 

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$1,200,000
Provided courtesy of Smith Spencer Real Estate
44 Photos 337 King Street UNIT B Charleston, SC 29401

337 King Street UNIT B
Charleston, SC 29401
Downtown
Residential

MLS# 24007600 / Active
3 br, 2 ba, 1 Half Bath, 2400 Sqft

Luxury condominium with designated parking, private rooftop deck, and Short Term Rental (STR) license in the heart of King Street, Charleston's pre... 

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$2,395,000
Provided courtesy of The Cassina Group
23 Photos
Open House: Sat Mar 30th, 11:00am - 2:00pm
154 Sugar Magnolia Way Charleston, SC 29414

154 Sugar Magnolia Way
Charleston, SC 29414
Autumn Chase
Residential

MLS# 24007599 / Active
4 br, 2 ba, 1 Half Bath, 1972 Sqft

Great opportunity to live in one of the most established West Ashley neighborhoods ...Grand Oaks Plantation! This 4 bd 2.5 ba home is in a prime lo... 

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$499,000
Provided courtesy of Carolina One Real Estate
17 Photos 2214 Chatelain Way Mount Pleasant, SC 29464

2214 Chatelain Way
Mount Pleasant, SC 29464
Southampton Pointe
Residential

MLS# 24007598 / Active
1 br, 1 ba, 767 Sqft

Check out this 1 bedroom/1 bathroom first floor condo in Southampton Pointe. Located in a gated community, features include vinyl plank flooring th... 

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$330,000
Provided courtesy of CRP Real Estate LLC
30 Photos 103 Summit Avenue Goose Creek, SC 29445

103 Summit Avenue
Goose Creek, SC 29445
Sedgefield
Residential

MLS# 24007594 / Active
4 br, 2 ba, 1200 Sqft

HVAC new in 2023, Tankless water heater new in 2022, and a new roof was installed in 2016! This sturdy ranch style home has only had two owners so ... 

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$280,000
Provided courtesy of Keller Williams Realty Charleston West Ashley
30 Photos 1294 Barracada Road Walterboro, SC 29488

1294 Barracada Road
Walterboro, SC 29488
Residential

MLS# 24007592 / Active
2 br, 2 ba, 1356 Sqft

Welcome home to this move-in ready home just minutes from town. From the open concept kitchen and living space to the 3 +/- acres of land, there is... 

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$340,000
Provided courtesy of Carolina Homes & Land Realty, LLC
66 Photos 58 Grand Pavilion Boulevard Isle Of Palms, SC 29451

58 Grand Pavilion Boulevard
Isle of Palms, SC 29451
Wild Dunes
Residential

MLS# 24007591 / Active
6 br, 6 ba, 1 Half Bath, 3972 Sqft

Nestled in the sought-after Wild Dunes community of Grand Pavilion, this turnkey oceanfront retreat sits mere steps from Isle of Palms's pristine b... 

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$6,995,000
Provided courtesy of Daniel Ravenel Sotheby's International Realty
28 Photos 3553 Shipwatch Road Kiawah Island, SC 29455

3553 Shipwatch Road
Kiawah Island, SC 29455
Seascape Villas
Residential

MLS# 24007590 / Active
3 br, 3 ba, 1930 Sqft

New co-ownership opportunity: Own one-eighth of this professionally managed, turnkey home by Pacaso. Wake to the sounds of ocean waves and enjoy th... 

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$560,000
Provided courtesy of Pam Harrington Exclusives
61 Photos
Open House: Tomorrow 2:00pm - 4:00pm
837 Captain Toms Crossing Johns Island, SC 29455

837 Captain Toms Crossing
Johns Island, SC 29455
Grimball Gates
Residential

MLS# 24007589 / Active
4 br, 3 ba, 2332 Sqft

Welcome to the picture of southern living in the prestigious gated community of Grimball Gates. Nestled within one of Charleston's most esteemed ne... 

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$850,000
Provided courtesy of Carolina One Real Estate
26 Photos 103 Hampton Avenue Goose Creek, SC 29445

103 Hampton Avenue
Goose Creek, SC 29445
Oaks Estates
Residential

MLS# 24007588 / Active
3 br, 2 ba, 1968 Sqft

Nestled on a quaint street in Goose Creek, South Carolina, 103 Hampton Ave embodies the essence of cozy suburban living. This charming brick ranch ... 

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$369,000
Provided courtesy of Keller Williams Realty Charleston
38 Photos 106 Trellis Court Summerville, SC 29486

106 Trellis Court
Summerville, SC 29486
Sangaree Gardens
Residential

MLS# 24007587 / Active
3 br, 2 ba, 1709 Sqft

Welcome home to 106 Trellis Court, located in the heart of Summerville. This well maintained home by the original owners is ready for you to move-i... 

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$329,800
Provided courtesy of AgentOwned Realty
40 Photos 110 Cardinal Flower Court Moncks Corner, SC 29461

110 Cardinal Flower Court
Moncks Corner, SC 29461
Stone Ridge
Residential

MLS# 24007586 / Active
4 br, 3 ba, 1 Half Bath, 2583 Sqft

Welcome home to Stone Ridge a prime location strategically located near Lake Moultrie, Old Santee Canal Park, and top Berkeley County schools. This... 

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$450,000
Provided courtesy of Synergy Group Properties
29 Photos 356 Bertram Road Summerville, SC 29485

356 Bertram Road
Summerville, SC 29485
Summerville On The Ashley
Residential

MLS# 24007585 / Active
3 br, 2 ba, 1187 Sqft

Well maintained, single story home in great location just outside of the hustle and bustle of Summerville. This home has ALL of the appliances incl... 

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$300,000
Provided courtesy of Realty ONE Group Coastal
21 Photos 812 W Saltash Alley Goose Creek, SC 29445

812 W Saltash Alley
Goose Creek, SC 29445
Devon Forest
Residential

MLS# 24007584 / Active
3 br, 2 ba, 1 Half Bath, 2313 Sqft

New Finished Construction in Devon Forest! Proudly own a new home with all of the upgrades in an established, neighborhood. Front porch leads to a ... 

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$379,900
Provided courtesy of Connie White Real Estate & Design, LLC
75 Photos 4707 Holbird Drive North Charleston, SC 29405

4707 Holbird Drive
North Charleston, SC 29405
Wando Woods
Residential

MLS# 24007582 / Active
4 br, 2 ba, 1 Half Bath, 3128 Sqft

Welcome to this exquisite waterfront residence on 5 acres of deepwater. Upon arrival, you'll be greeted by a custom-built home boasting a sprawling... 

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$2,300,000
Provided courtesy of Three Real Estate LLC
8 Photos 8766 Tigershark Avenue North Charleston, SC 29406

8766 Tigershark Avenue
North Charleston, SC 29406
Northwoods Pointe
Residential

MLS# 24007581 / Active
3 br, 2 ba, 1306 Sqft

Cozy 3BR,2BA, Ranch with a large backyard. Centrally located and within minutes to Boeing, Trident Hospital, AFB, CSU and the Mall. Open floor plan... 

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$299,000
Provided courtesy of Promise Land Realty,LLC
5 Photos 316 Anadale Court Charleston, SC 29418

316 Anadale Court
Charleston, SC 29418
Archdale
Residential

MLS# 24007580 / Active
3 br, 2 ba, 1 Half Bath, 2891 Sqft

**Professional Photos Coming Soon**Have you been dreaming and looking to purchase a deepwater home in the Charleston area? Look no further! This st... 

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$1,050,000
Provided courtesy of Southern Real Estate, LLC
55 Photos 2220 Jasper Boulevard Sullivans Island, SC 29482

2220 Jasper Boulevard
Sullivans Island, SC 29482
Residential

MLS# 24007578 / Active
4 br, 3 ba, 1 Half Bath, 2338 Sqft

This charming property offers the perfect blend of island tranquility and convenience. It's a leisurely three-block stroll to the pristine shores o... 

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$2,220,000
Provided courtesy of AgentOwned Realty Charleston Group
47 Photos
Open House: Sat Mar 30th, 1:00pm - 3:00pm
112 Lois Circle Moncks Corner, SC 29461

112 Lois Circle
Moncks Corner, SC 29461
Lake Moultrie Estates
Residential

MLS# 24007577 / Active
3 br, 2 ba, 1719 Sqft

Location! Location! Location! NO HOA!It really does make a difference. If you enjoy fishing, boating, or just being outdoors then don't pass this o... 

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$415,000
Provided courtesy of Realty ONE Group Coastal
45 Photos 108 Annie Circle Summerville, SC 29483

108 Annie Circle
Summerville, SC 29483
Simmons Terrace
Residential

MLS# 24007576 / Active
5 br, 3 ba, 2445 Sqft

Welcome to this delightful home nestled in the highly sought-after Simmons Terrace neighborhood. This wonderful abode located on a quiet cul-de-sac... 

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$619,000
Provided courtesy of Ebb & Flow Real Estate, LLC
15 Photos 304 Tree Branch Circle Summerville, SC 29483

304 Tree Branch Circle
Summerville, SC 29483
Summer Wood
Residential

MLS# 24007574 / Active
2 br, 2 ba, 1 Half Bath, 1088 Sqft

Welcome to your new home sweet home! This charming 2-bedroom, 2.5-bathroom townhouse offers the perfect blend of comfort, convenience, and relaxati... 

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$235,000
Provided courtesy of Executive Realty
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Hey there, thanks for reaching out!
Are schools important to you?
When do you need us?
Your general price point?
Don’t worry... this is not set in stone :)
Want to add a note?
EXPLORE CHARLESTON ON YOUR OWN
Call: 843-990-1313
Hey there, thanks for reaching out!
Are schools important to you?
When do you need us?
Your general price point?
Don’t worry... this is not set in stone :)
Want to add a note?
EXPLORE CHARLESTON ON YOUR OWN
Call: 843.708.4488