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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289 Sumter Street
Charleston, SC 29403
Westside
Residential

MLS# 18010768 / Pending
5 br, 3 ba, 1 half bath, 2806 sqft

Large house in need of complete renovations. First floor has formal living with fireplace (non-working) separate dining or bedroom, large kitchen,... 

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$450,000
Provided courtesy of AgentOwned Charleston Group

206 Oxford Way
Summerville, SC 29486
Sangaree
Residential

MLS# 18010733 / Active
3 br, 2 ba, 1056 sqft

This 3 bedroom, 2 bathroom home is located in Sangaree, close to I-26 and the new Nexton Square development, great location! The living areas have ... 

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$120,000
Provided courtesy of Palm Realty Group, llc

328 Whispering Breeze Lane
Summerville, SC 29483
Cane Bay Plantation
Residential

MLS# 18010261 / Active
4 br, 2 ba, 1 half bath, 2744 sqft

Don't wait for new construction!!! Welcome Home!!! This beautiful four bedroom two and a half bath home sits on a corner lot with scenic views. Thi... 

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$319,900
Provided courtesy of Carolina One Cane Bay/ Nexton

103 Bayleaf Court
Summerville, SC 29483
Sangaree
Residential

MLS# 18009982 / Active
3 br, 2 ba, 1508 sqft

LENDER APPROVED SHORT SALE at the terms in listing. Can CLOSE as soon as Buyers loan is ready. NO MORE WAIT. At this price lender will allow $4200 ... 

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$140,000
Provided courtesy of Coldwell Banker Residential Brokerage

287 Decatur Drive
Summerville, SC 29483
Cane Bay Plantation
Residential

MLS# 18009781 / Active
n/a br, 3 ba, 2379 sqft

This is a short sale with tenants in place until July 29 2018. 

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$245,000
Provided courtesy of Carolina One Real Estate

302 Houston Drive
Ladson, SC 29456
Briddleford Ridge
Residential

MLS# 18009645 / Active Contingent
3 br, 2 ba, 1402 sqft

Home is a complete renovation, handy-man super special. Roof is newer. Garage has been converted to two rooms. Nice large corner lot, large back... 

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$100,000
Provided courtesy of Home Solution Real Estate Services

406 Clarine Drive
Goose Creek, SC 29445
Boulder Bluff
Residential

MLS# 18009293 / Active Contingent
3 br, 1 ba, 1 half bath, 1037 sqft

This is a short sale. Home needs extensive work. Lots of items in back yard that need to be removed. It has a 3br/1.5 bath. 

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$80,000
Provided courtesy of Brand Name Real Estate

5504 Norwich Road
Adams Run, SC 29426
Residential

MLS# 18007825 / Active
3 br, 2 ba, 1600 sqft

House in need of repairs. Sold AS IS. 

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$85,000
Provided courtesy of Ysrael Properties

361 Camelot Drive
Goose Creek, SC 29445
Camelot Village
Residential

MLS# 18007260 / Active Contingent
3 br, 2 ba, 1402 sqft

This is a three bedroom 2 bath Handy Man Special can make a nice starter home with a good amount of living space and large bedrooms. Located in the... 

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$140,000
Provided courtesy of eXp Realty Charleston

2152 Summerwood Drive
Mount Pleasant, SC 29466
Planters Pointe
Residential

MLS# 18004970 / Active Contingent
4 br, 3 ba, 2435 sqft

Fantastic value in one of Mt. Pleasant's most sought-after neighborhoods. This 4-bedroom, 3 full bath home has 2435 square feet and a very desirab... 

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$389,000
Provided courtesy of Carolina One Real Estate

4187 Balmoral Court
North Charleston, SC 29418
Collins Park Villas
Residential

MLS# 18003055 / Active Contingent
2 br, 2 ba, 1 half bath, 1344 sqft

Come one, Come all. Investors, this won't last long! Just needs a little tlc to make a great rental. The 2 bedrooms are very spacious, very open... 

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$49,900
Provided courtesy of Coldwell Banker Residential Brokerage

8732 E Fairway Woods Circle
North Charleston, SC 29420
Coosaw Creek Country Club
Residential

MLS# 18002627 / Active
4 br, 3 ba, 1 half bath, 3294 sqft

4 bedroom & 3.5 Bedroom home w/Pool in gated Coosaw Creek Country Club. Great floor plan. Featuring Hardwood Floors thru out the downstairs and har... 

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$315,000
Reduced -$10,000
Provided courtesy of Carolina One Real Estate

108 Alan Court
Summerville, SC 29485
Greenhurst
Residential

MLS# 18000395 / Active Contingent
4 br, 1 ba, 1 half bath, 1138 sqft

Ton of potential with this 4 bedroom 2 bath home. Located in DD 2 school zone on a quite cul-de-sac. Large eat-in kitchen, huge fenced backyard, an... 

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$100,000
Provided courtesy of AgentOwned Premiere Group

423 Aberdeen Circle
Summerville, SC 29483
Scotts Mill
Residential

MLS# 18000373 / Active Contingent
4 br, 3 ba, 1 half bath, 2096 sqft

*** SHOWINGS BEGIN TUESDAY JANUARY 16TH*** Amazing and RARE opportunity to purchase this deeply discounted SHORT SALE. Located in the highly desira... 

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$169,900
Provided courtesy of ChuckTown Homes, LLC

7660 Blue House Lane
Edisto Island, SC 29438
Deepwater
Residential

MLS# 17033608 / Active
6 br, 3 ba, 2901 sqft

The Islands at Blue House - exquisite, ever changing views of wildlife, the creek, marsh,& N. Edisto from your classic lowcountry home nestled in a... 

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$850,000
Provided courtesy of Edisto Sales & Rentals Realty

316 Santee Drive
Santee, SC 29142
Santee Cooper Resort
Residential

MLS# 17032433 / Active
3 br, 2 ba, 1 half bath, 2376 sqft

Stunning home on a half acre lot that backs up right on the golf coarse. As soon as you enter your eyes will go directly to the large open floor pl... 

More Details

$215,000
Reduced -$5,000
Provided courtesy of Realty ONE Group Coastal

322 Cabell Street
Charleston, SC 29407
Wappoo Shores
Residential

MLS# 17032204 / Active Contingent
3 br, 2 ba, 1930 sqft

Located in the heart of West Ashley, you will be minutes from schools, shopping, and restaurants. Walking in you are greeted by gorgeous hard wood ... 

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$300,000
Reduced -$25,000
Provided courtesy of RE/MAX Alliance

8035 Nova Court
North Charleston, SC 29420
Colony North
Residential

MLS# 17032199 / Active Contingent
4 br, 2 ba, 2069 sqft

Located in a great neighborhood. The house has a split floor plan with 3 bedrooms on 1 side and Master on the other. Previous listings stated the ... 

More Details

$149,900
Reduced -$10,000
Provided courtesy of Coastalina Realty of Charleston

400 Lakeview Drive
Summerville, SC 29485
Ashborough
Residential

MLS# 17031354 / Active Contingent
5 br, 3 ba, 1 half bath, 3997 sqft

Rare 1+ac corner lot on tidal creek - house built on higher ground - no flood insurance required. Brick 5BR home with the space to entertain: Firep... 

More Details

$360,000
Reduced -$30,000
Provided courtesy of Carolina One Real Estate

111 Red Rooster Circle
Moncks Corner, SC 29461
Residential

MLS# 17029182 / Active Contingent
4 br, 2 ba, 2112 sqft

Are you ready for a home in country that's still close to shopping, dining, entertainment, and the new Volvo site? Then this 4 bedroom, 2 bathroom ... 

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$70,000
Provided courtesy of Matt O'Neill Real Estate

14 Sandpiper Court
Isle Of Palms, SC 29451
Wild Dunes
Residential

MLS# 17029140 / Active
3 br, 2 ba, 1256 sqft

Located in the heart of Wild Dunes, you will be close to shopping, schools, restaurants, and minutes from the gorgeous IOP Beach. This is perfect f... 

More Details

$565,000
Reduced -$10,000
Provided courtesy of RE/MAX Alliance
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 04-22-2018 5:05pm 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 2018 Charleston Trident Multiple Listing Service, Inc. All rights reserved.
Commercial Sale/Lease: Copyright 2018 South Carolina commercial MLS, Inc. All rights reserved. Last updated on 04-22-2018 5:05pm 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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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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