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
15 44th Avenue
Isle of Palms, SC 29451
Residential
MLS# 24011670 / Active
Ethereal, spacious, and sophisticated, this turn-key one level home in the heart of Isle of Palms is located only one block from the beach and a sh...
725 Beauregard Street
Charleston, SC 29412
Clearview
Residential
MLS# 24011669 / Active
Classic James Island ranch in the popular Clearview subdivision! This sprawling single story home features four bedrooms and 3 full baths, along wi...
118 Palfrey Drive
Ridgeville, SC 29472
Parker's Preserve
Residential
MLS# 24011667 / Active
Popular Wilmington D Floorplan with 4 Bedrooms all upstairs, Designer Kitchen with Wall Oven/Microwave, Quartz Counter Tops, Screen Porch, and Sepa...
116 Palfrey Drive
Ridgeville, SC 29472
Parker's Preserve
Residential
MLS# 24011666 / Active
Spectacular Avery Ranch with the additional Second floor with Bedroom, Loft, and Full Bath! This home also boasts the Designer Kitchen with Wall Ov...
215 E Erie Avenue
Folly Beach, SC 29439
Folly Beach
Residential
MLS# 24011665 / Active
Experience vintage Folly at its finest! Location is key, and this property is just steps away from Folly's sandy shores and Bert's Island Market. E...
893 Corinth Court
Mount Pleasant, SC 29464
Candlewood
Residential
MLS# 24011664 / Active
Welcome Home!! Lots of recent work has been done on this nice 3-bedroom 2 bath home. The exterior has just been professionally painted and a new ch...
2944 Treadwell Street
Mount Pleasant, SC 29466
Hamlin Plantation
Residential
MLS# 24011663 / Active
This beautiful townhome offers the perfect opportunity to own a well-maintained, three bedroom townhome in one of Mount Pleasant's most popular nei...
1636 Florentia Street
Mount Pleasant, SC 29464
Midtown
Residential
MLS# 24011662 / Active
Location, Location, LOCATION! 12 minutes to downtown Charleston and 10 minutes to two of our beautiful local beaches. This gorgeous 3 year old town...
9000 Palmetto Drive UNIT A-302
Isle of Palms, SC 29451
Wild Dunes Resort
Residential
MLS# 24011661 / Active
Welcome to 302-A Port O Call. Get ready to enjoy island life, and beautiful ocean views, within the gorgeous, gated resort of Wild Dunes. Being con...
45 Sycamore Avenue UNIT #425
Charleston, SC 29407
Concord West Of The Ashley
Residential
MLS# 24011660 / Active
Beautiful 1 bed 1 bath condo in the highly desired gated community of Concord West of the Ashley. Keyless entry. Freshly painted and new carpet thr...
225 Witherspoon Street
Summerville, SC 29486
Carnes Crossroads
Residential
MLS# 24011659 / Active
The popular Rutledge plan offers 4 bedrooms and a loft! First floor areas include the owner's suite, open-concept main living areas complete with k...
1192 Sharpestowne Court
Mount Pleasant, SC 29466
Porchers Preserve
Residential
MLS# 24011658 / Active
Impeccable home with extensive upgrades. Welcome to this beautiful four bedroom, 3 1/2 bath home nestled in the desirable neighborhood of Porchers ...
198 Denham Street
Summerville, SC 29486
Carnes Crossroads
Residential
MLS# 24011657 / Active
This two-story Chadwick home showcases a spacious and modern open layout shared among the gourmet kitchen, dining and Great Room. Ideal for outdoor...
126 Land O Pines Circle
Moncks Corner, SC 29461
Land-o-pines
Residential
MLS# 24011655 / Active
Welcome to 126 Land O Pines Circle, a charming 3-bedroom, 2.5-bath home with a flexible space in the serene pine village of Pinopolis. This meticul...
1945 Village Crossing Drive
Charleston, SC 29492
Daniel Island
Residential
MLS# 24011646 / Active
Stunning views for miles steal the show in this custom elevated home in the sought after enclave The COVE on Daniel Island. Feel the breezes of the...
1033 Marlow Drive
Moncks Corner, SC 29461
Residential
MLS# 24011644 / Active
Ranch style home on a good-sized (.89 acre), fenced lot just 5 minutes to Lake Moutrie short stay area or the Cooper River. Enjoy leisurely morning...
139 Eldridge Street
Summerville, SC 29486
Nexton
Residential
MLS# 24011643 / Active
This One Level Model is the Dunlin floor Plan in beautiful Mystic Blue siding color. Features three bedrooms and two baths on a large homesite with...
322 Buttonwood Lane
Moncks Corner, SC 29461
Moncks Corner
Residential
MLS# 24011642 / Active
Welcome to this rare opportunity to own this home on 3.55 acres! This unique property is conveniently located just outside Moncks Corner city limit...
846 Locksley Drive
Charleston, SC 29407
Sherwood Forest
Residential
MLS# 24011641 / Active
There are two houses on this lot! One rental and one currently owner occupied. Total square footage is around 3000. Cost per square foot is $217. T...
358 Lynwood Drive
Charleston, SC 29414
Oakland
Residential
MLS# 24011639 / Active
3 bed 1.5 bath in Oakland. Hardwood floors. Lush, wooded private backyard. Needs TLC. Great location. Convenient to 526, shopping and restaurants.
1148 Glorious Way
Summerville, SC 29485
Summers Corner
Residential
MLS# 24011638 / Active
Welcome to Horizons, an exclusive 55+ gated active adult community situated in the highly desirable Summers Corner masterplan. Residents enjoy low-...
Increase +$1,000
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 05-09-2024 2:25 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.