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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64 Photos 53 Timmerman Drive Charleston, SC 29407

53 Timmerman Drive
Charleston, SC 29407
Byrnes Downs
Residential

MLS# 24018975 / Active
4 br, 2 ba, 1 Half Bath, 1339 Sqft

This is the one everyone has been looking for! This incredibly unique property is fully renovated with a stunning guest house, privacy, beautiful v... 

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$1,435,000
Provided courtesy of Seignious and Smith, LLC
75 Photos 1635 Siloh Drive UNIT #483 Mount Pleasant, SC 29466

1635 Siloh Drive UNIT #483
Mount Pleasant, SC 29466
Liberty Hill Farm
Residential

MLS# 24018974 / Active
5 br, 3 ba, 1 Half Bath, 2930 Sqft

Welcome to the Hamlin, a luxurious 5 bed, 3.5 bath coastal paradise. This beautiful elevated home exudes sophistication and offers a range of exqui... 

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$1,191,640
Provided courtesy of K. Hovnanian Homes
39 Photos 200 Lark Street Summerville, SC 29485

200 Lark Street
Summerville, SC 29485
Meadowbrook
Residential

MLS# 24018971 / Active
3 br, 2 ba, 1174 Sqft

This charming brick ranch, nestled on a big corner lot with mature privacy shrubs and an expansive open backyard, exudes classic appeal. Inside, re... 

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$299,000
Provided courtesy of Carolina One Real Estate
75 Photos 1656 Siloh Drive UNIT #473 Mount Pleasant, SC 29466

1656 Siloh Drive UNIT #473
Mount Pleasant, SC 29466
Liberty Hill Farm
Residential

MLS# 24018967 / Active
4 br, 3 ba, 1 Half Bath, 2520 Sqft

The Stono plan is a 4 bedroom, 3.5 bathroom home that has it all. This beautifully elevated home creates a distinct coastal feel with a 3 car drive... 

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$1,248,020
Provided courtesy of K. Hovnanian Homes
30 Photos 4325 Evanston Boulevard North Charleston, SC 29418

4325 Evanston Boulevard
North Charleston, SC 29418
Evanston Estates
Residential

MLS# 24018966 / Active
3 br, 2 ba, 1721 Sqft

Welcome to 4325 Evanston Boulevard, North Charleston, SC 29418! This stunning, fully renovated home boasts 3 bedrooms, 2 bathrooms, and 1,721 sqft ... 

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$399,000
Provided courtesy of Coldwell Banker Comm/Atlantic Int'l
35 Photos 333 Clearwater Drive Goose Creek, SC 29445

333 Clearwater Drive
Goose Creek, SC 29445
Harbour Lake
Residential

MLS# 24018962 / Active
3 br, 2 ba, 1094 Sqft

Nestled in the heart of an established Goose Creek neighborhood, this charming ranch-style home exudes warmth and character. As you approach, a wel... 

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$315,000
Provided courtesy of Matt O'Neill Real Estate
49 Photos 3726 Apiary Lane Johns Island, SC 29455

3726 Apiary Lane
Johns Island, SC 29455
Laurel Oak
Residential

MLS# 24018960 / Active
4 br, 3 ba, 1 Half Bath, 3572 Sqft

The Kensley Plan's inviting foyer opens to a spacious open concept plan with a well-equipped kitchen that features a large center island, plenty of... 

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$899,900
Provided courtesy of Carolina One Real Estate
28 Photos 8811 Citronella Way North Charleston, SC 29406

8811 Citronella Way
North Charleston, SC 29406
Magnolia Pointe
Residential

MLS# 24018958 / Active
4 br, 2 ba, 1 Half Bath, 2565 Sqft

The Wilmington is a two-story, four-bedroom, two-and-a-half-bath home with a dedicated home office, formal dining room, spacious family room, and k... 

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$429,850
Provided courtesy of Eastwood Homes
48 Photos 14 Lockwood Drive UNIT 10l Charleston, SC 29401

14 Lockwood Drive UNIT 10l
Charleston, SC 29401
Ashley House
Residential

MLS# 24018955 / Active
1 br, 1 ba, 530 Sqft

Embrace the epitome of Charleston charm in this beautifully updated studio condo at 14 Lockwood Dr! Perfect for professionals, students, or anyone ... 

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$349,900
Provided courtesy of Brand Name Real Estate
3 Photos 198 Recess Drive Ladson, SC 29456

198 Recess Drive
Ladson, SC 29456
Eagle Run
Residential

MLS# 24018952 / Active
4 br, 2 ba, 1 Half Bath, 1821 Sqft

Welcome home to this beautiful double porch Charleston style home situated in this family friendly neighborhood of Eagle Run, close to everything y... 

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$345,000
Provided courtesy of Century 21 Excel
34 Photos 48 Crosscreek Drive Charleston, SC 29412

48 Crosscreek Drive
Charleston, SC 29412
Crosscreek
Residential

MLS# 24018951 / Active
4 br, 3 ba, 1 Half Bath, 2835 Sqft

Step into this lovely 4 bedroom 3.5 bath home nestled on a spacious corner lot. This home hosts dual primary bedrooms. One is upstairs and the othe... 

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$749,900
Provided courtesy of EXP Realty LLC
48 Photos 1657 Siloh Drive UNIT #491 Mount Pleasant, SC 29466

1657 Siloh Drive UNIT #491
Mount Pleasant, SC 29466
Liberty Hill Farm
Residential

MLS# 24018949 / Active
5 br, 3 ba, 1 Half Bath, 3373 Sqft

Welcome home to Liberty Hill Farm, one of the area's most sought-after brand-new communities located in the heart of Mount Pleasant. You will enjoy... 

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$1,349,770
Provided courtesy of K. Hovnanian Homes
71 Photos 1150 Chandler Road Awendaw, SC 29429

1150 Chandler Road
Awendaw, SC 29429
Awendaw
Residential

MLS# 24018948 / Active
4 br, 3 ba, 1 Half Bath, 3098 Sqft

Rare acreage JUST outside the city limits of Mt. Pleasant, technically in Awendaw but zoned Charleston County. The owners have painstakingly spent ... 

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$2,250,000
Provided courtesy of The Boulevard Company, LLC
35 Photos 211 Dillard Drive Goose Creek, SC 29445

211 Dillard Drive
Goose Creek, SC 29445
Laurel Hill
Residential

MLS# 24018947 / Active
3 br, 2 ba, 1 Half Bath, 1560 Sqft

If you are seeking a beautifully remodeled home with modern amenities and luxurious finishes, look no further. This stunning 3-bedroom, 2.5-bathroo... 

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$435,000
Provided courtesy of Dunes Properties of Chas Inc
50 Photos 30 Darlington Avenue Charleston, SC 29403

30 Darlington Avenue
Charleston, SC 29403
Wagener Terrace
Residential

MLS# 24018945 / Active
4 br, 3 ba, 2832 Sqft

INCREDIBLE OPPORTUNITY!!! Stop settling for less and start living your dream in the heart of Downtown Charleston's coveted Wagener Terrace neighbor... 

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$1,775,000
Provided courtesy of Daniel Ravenel Sotheby's International Realty
34 Photos 407 Eagleston Drive Moncks Corner, SC 29461

407 Eagleston Drive
Moncks Corner, SC 29461
Inglewood
Residential

MLS# 24018944 / Active
3 br, 2 ba, 1090 Sqft

Located in the heart of Moncks Corner, this beautiful ranch-style home is a true gem. With no HOA, you can enjoy the freedom of living without home... 

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$295,000
Provided courtesy of RE/MAX Cornerstone Realty
58 Photos 150 Carolinian Drive Summerville, SC 29485

150 Carolinian Drive
Summerville, SC 29485
Legend Oaks Plantation
Residential

MLS# 24018943 / Active
3 br, 2 ba, 1 Half Bath, 2182 Sqft

Welcome to the beautiful Legend Oaks Community, located in the highly desired DD2 School District! This well-maintained, one-owner home has much to... 

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$405,500
Provided courtesy of EXP Realty LLC
66 Photos 126 Old Course Road Summerville, SC 29485

126 Old Course Road
Summerville, SC 29485
Legend Oaks Plantation
Residential

MLS# 24018941 / Active
4 br, 2 ba, 1 Half Bath, 2500 Sqft

Desirable Legend Oaks Plantation!! On the golf course! Freshly painted, inside and out! You will feel at home from the minute you drive into the ne... 

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$510,000
Provided courtesy of Carolina One Real Estate
15 Photos 609 King Street UNIT #416 Charleston, SC 29403

609 King Street UNIT #416
Charleston, SC 29403
City Of Charleston
Residential

MLS# 24018939 / Active
2 br, 2 ba, 1305 Sqft

Coming in 2026! The Peninsula of Charleston is an ownership-model, continuing care retirement community (CCRC) on highly desirable upper King Stree... 

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$1,296,500
Provided courtesy of Peninsula of Charleston R.E.
35 Photos 28 Regency Oaks Drive Summerville, SC 29485

28 Regency Oaks Drive
Summerville, SC 29485
Bridges Of Summerville
Residential

MLS# 24018938 / Active
3 br, 2 ba, 1 Half Bath, 1760 Sqft

This spacious two-story home in Bridges of Summerville located on a corner lot is a must see. When you walk into the home the inviting foyer opens ... 

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$355,000
Provided courtesy of ChuckTown Homes Powered By Keller Williams
15 Photos 609 King Street UNIT #740 Charleston, SC 29403

609 King Street UNIT #740
Charleston, SC 29403
City Of Charleston
Residential

MLS# 24018937 / Active
1 br, 1 ba, 1 Half Bath, 1200 Sqft

Coming in 2026! The Peninsula of Charleston is an ownership-model, continuing care retirement community (CCRC) on highly desirable upper King Stree... 

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$1,520,900
Provided courtesy of Peninsula of Charleston R.E.
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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 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 07-25-2024 2:44 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.
Commercial Sale/Lease: Copyright 2024 South Carolina commercial MLS, Inc. All rights reserved. Last updated on 07-25-2024 2:44 PM EST est.

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Hey there, thanks for reaching out!
Are schools important to you?
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Don’t worry... this is not set in stone :)
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Call: 914.771.1490
Hey there, thanks for reaching out!
Are schools important to you?
When do you need us?
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Don’t worry... this is not set in stone :)
Want to add a note?
EXPLORE CHARLESTON ON YOUR OWN
Call: 843.300.7021