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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22 Photos 1080 Lexi Court Ladson, SC 29456

1080 Lexi Court
Ladson, SC 29456
Oakbrook Park
Residential

MLS# 19018311 / Active
3 br, 2 ba, 1 Half Bath, 1257 Sqft

Located in charming Oakbrook Park, you will be close to shopping, schools, and restaurants. Walking in you are greeted by smooth ceilings, hardwood... 

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$140,000
Reduced -$5,000
Provided courtesy of RE/MAX Alliance
22 Photos 488 Saint Andrews Boulevard Charleston, SC 29407

488 Saint Andrews Boulevard
Charleston, SC 29407
Moreland
Residential

MLS# 19016840 / Active
3 br, 2 ba, 1492 Sqft

Perfect investor opportunity located a stone's throw from downtown Charleston. This property is graced with 2 beautiful Live Oaks and is essentiall... 

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$255,000
Reduced -$10,000
Provided courtesy of Marshall Walker Real Estate
13 Photos 1295 White Tail Path Charleston, SC 29414

1295 White Tail Path
Charleston, SC 29414
Hunt Club Phase II
Residential

MLS# 19015773 / Active
4 br, 2 ba, 1 Half Bath, 2643 Sqft

Gorgeous home on a pond lot adjacent to a wooded area in the prestigious Hunt Club subdivision. The lot is configured to provide extra space from t... 

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$329,000
Reduced -$1,000
Provided courtesy of Carolina One Real Estate
20 Photos 164 Balsam Circle Summerville, SC 29485

164 Balsam Circle
Summerville, SC 29485
Madison Ridge
Residential

MLS# 19014708 / Active
5 br, 2 ba, 1 Half Bath, 2310 Sqft

A 5-Bedroom Gem with spacious sought after Master Bedroom with separate shower/tub with dual vanities on the main level. Upgraded Kitchen with a w... 

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$278,000
Provided courtesy of The Elite Realty Group of SC, LLC
38 Photos 43 Morgans Cove Drive Isle Of Palms, SC 29451

43 Morgans Cove Drive
Isle Of Palms, SC 29451
Wild Dunes
Residential

MLS# 19013184 / Active
4 br, 3 ba, 1 Half Bath, 2476 Sqft

This is a SHORT SALE lender approved price. What an opportunity! This 4 Bedroom, 3 1/2 Bath home, located in the much desired area of Wild Dunes o... 

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$769,900
Provided courtesy of Century 21 Expert Advisors
23 Photos 130 River Landing Drive Charleston, SC 29492

130 River Landing Drive
Charleston, SC 29492
Daniels Landing
Residential

MLS# 19008124 / Active
2 br, 2 ba, 1291 Sqft

** THIS UNIT/BUILDING HAS MARSH VIEWS SO MAKE SURE TO PAY ATTENTION CLOSELY! ESPECIALLY WITH OUR ATTRACTIVE ASKING PRICE! IT'S AN AMAZING OPPORTU... 

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$240,000
Increase +$35,000
Provided courtesy of Fred Holland Realty
23 Photos 5886 Ryans Bluff Road North Charleston, SC 29418

5886 Ryans Bluff Road
North Charleston, SC 29418
Covington Hills
Residential

MLS# 18027738 / Active
3 br, 3 ba, 3312 Sqft

3 bedroom, 3 bathroom, 1 story home. Spacious eat-in kitchen with breakfast bar, walk-in pantry and wet bar. LARGE formal dining room and family... 

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$225,000
Provided courtesy of Carolina One Real Estate
17 Photos 164 Palm Cove Way Mount Pleasant, SC 29466

164 Palm Cove Way
Mount Pleasant, SC 29466
Dunes West
Residential

MLS# 18027640 / Active
2 br, 2 ba, 1 Half Bath, 2175 Sqft

This exquisitely upgraded townhome, located in the exclusive Dunes West gated community has MARSH VIEWS from nearly every window making it a privat... 

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$339,000
Reduced -$20,000
Provided courtesy of Coldwell Banker Residential Brokerage
35 Photos 1704 Hopeman Lane Mount Pleasant, SC 29466

1704 Hopeman Lane
Mount Pleasant, SC 29466
Charleston National
Residential

MLS# 18022328 / Active
2 br, 2 ba, 1 Half Bath, 1920 Sqft

This is a Short Sale, subject to 3rd party approval and being sold ''As Is''. Home is no longer staged; however, it is a beautiful townhome tucked ... 

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$310,000
Provided courtesy of Carolina One Real Estate
1 Photos 2465 The Haul Over Johns Island, SC 29455

2465 The Haul Over
Johns Island, SC 29455
Seabrook Island
Residential

MLS# 18018610 / Active
3 br, 2 ba, 1 Half Bath, 2514 Sqft

Easy to show! Home needs updates, but in a great location in Seabrook Island. Back porch looks over an Egret estuary and has views of the golf cour... 

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$465,000
Provided courtesy of Harbins Two, Inc
30 Photos 5804 Palmetto Drive Isle Of Palms, SC 29451

5804 Palmetto Drive
Isle Of Palms, SC 29451
Wild Dunes
Residential

MLS# 16012207 / Active
2 br, 2 ba, 1231 Sqft

POSSIBLE SHORT SALE! !!!FURNISHED END UNIT WITH GREAT RENTAL HISTORY. THERE IS A WRAP AROUND PRIVATE BALCONY THAT HAS VIEWS OF THE POND AND COURTY... 

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$485,000
Reduced -$10,000
Provided courtesy of Carroll Realty
Residential, Land, Other Disclaimer:

Broker Reciprocity 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 Carolina One Real Estate 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 07-16-2019 11:01 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 2019 Charleston Trident Multiple Listing Service, Inc. All rights reserved.
Commercial Sale/Lease: Copyright 2019 South Carolina commercial MLS, Inc. All rights reserved. Last updated on 07-16-2019 11:01 PM EST est.

Any images related to data from the MLS is the sole property of the MLS and not the responsibility of the owner of this website.


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Multiple Listing Service

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Multiple Websites

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Your home will be shared through various social networking portals. Nat controls several Facebook pages and groups. Your property will be shared on pages like “Charleston, SC” - “Fans of Charleston” - “Fans of MUSC” - “Mt. Pleasant SC”- “The Nat Wallen Team” - ”Nat Wallen Real Estate” and “The Best of Charleston.”


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