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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38 Photos 4269 Jacobs Pt Court Ravenel, SC 29470

4269 Jacobs Pt Court
Ravenel, SC 29470
Jacobs Point
Residential

MLS# 24007743 / Active
3 br, 3 ba, 1 Half Bath, 2309 Sqft

If you are looking for peace and serenity...You've found your home! This is paradise situated on 1.63 acres, overlooking the marsh and Wallace Cree... 

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$925,000
Provided courtesy of Carolina One Real Estate
20 Photos 1128 Stokes Road Walterboro, SC 29488

1128 Stokes Road
Walterboro, SC 29488
Residential

MLS# 24007742 / Active
3 br, 2 ba, 1232 Sqft

NEW INVITING LOOK! TURNKEY CONDITION!! Enter into a OPEN Living Room that flows right into the Eat-in Kitchen, that is complete with White Cabinets... 

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$165,000
Provided courtesy of All Country Real Estate, LLC
37 Photos 34 Fairway Dunes Lane Isle Of Palms, SC 29451

34 Fairway Dunes Lane
Isle of Palms, SC 29451
Wild Dunes
Residential

MLS# 24007740 / Active
3 br, 3 ba, 1644 Sqft

Beautifully UPDATED, fully furnished, 3 bedroom, 3 bath townhome on the Links Golf Course in the gated resort community of Wild Dunes. This section... 

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$1,175,000
Provided courtesy of AgentOwned Realty Preferred Group
36 Photos 1923 Kerry Street North Charleston, SC 29406

1923 Kerry Street
North Charleston, SC 29406
Ferndale
Residential

MLS# 24007739 / Active
3 br, 2 ba, 1425 Sqft

Renovated home centrally located in North Charleston near Park Circle. Upgrades include a new roof, new hvac system, new drywall, new tile flooring... 

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$329,000
Provided courtesy of Coastal Point Real Estate
41 Photos 153 Ivory Shadow Road Summerville, SC 29486

153 Ivory Shadow Road
Summerville, SC 29486
Cane Bay Plantation
Residential

MLS# 24007738 / Active
4 br, 2 ba, 1774 Sqft

Pine Hills in Cane Bay, Summerville, South Carolina, offers a serene suburban lifestyle. Nestled amidst lush landscapes, it features elegant homes,... 

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$421,940
Provided courtesy of D R Horton Inc
27 Photos 168 Donning Drive Summerville, SC 29483

168 Donning Drive
Summerville, SC 29483
The Ponds
Residential

MLS# 24007730 / Active
5 br, 2 ba, 1 Half Bath, 3032 Sqft

Welcome to 168 Donning Drive, located in the highly sought after Ponds community of Summerville! This Charleston style home is situated among tall ... 

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$555,000
Provided courtesy of AgentOwned Realty
50 Photos 1109 Studdingsail Lane Charleston, SC 29412

1109 Studdingsail Lane
Charleston, SC 29412
The Cove at Folly
Residential

MLS# 24007729 / Active
4 br, 3 ba, 1 Half Bath, 2226 Sqft

Outstanding views are yours with this elevated coastal townhome overlooking Folly Creek and surrounding marsh. Slow down and take in the golden sun... 

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$1,150,000
Provided courtesy of Carolina One Real Estate
49 Photos
Open House: Sat Mar 30th, 12:00pm - 3:00pm
402 Verbena Avenue Summerville, SC 29483

402 Verbena Avenue
Summerville, SC 29483
White Gables
Residential

MLS# 24007728 / Active
3 br, 2 ba, 1 Half Bath, 2054 Sqft

Welcome to a charming two story move-in ready Charleston Southern style home. The front porch is an inviting place to relax. Stepping into the foye... 

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$382,600
Provided courtesy of Carolina One Real Estate
17 Photos 109 Chatfield Circle Goose Creek, SC 29445

109 Chatfield Circle
Goose Creek, SC 29445
Crowfield Plantation
Residential

MLS# 24007724 / Active
3 br, 2 ba, 1997 Sqft

Welcome to this charming home with a cozy fireplace, set in a serene natural color palette. The spacious layout offers flexibility with additional ... 

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$412,000
Provided courtesy of Opendoor Brokerage, LLC
40 Photos 3180 Landing Parkway Charleston, SC 29420

3180 Landing Parkway
Charleston, SC 29420
Appian Landing
Residential

MLS# 24007722 / Active
3 br, 2 ba, 1820 Sqft

Welcome to your Dream oasis featuring a shimmering gunite pool, complete with a cabana area, tanning patio, and garden! Nestled in the desirable ne... 

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$649,900
Provided courtesy of Real Broker, LLC
30 Photos 9981 Winged Elm Street Ladson, SC 29456

9981 Winged Elm Street
Ladson, SC 29456
Coosaw Preserve
Residential

MLS# 24007720 / Active
4 br, 2 ba, 1 Half Bath, 2627 Sqft

Situated within the highly sought-after Dorchester District 2 school system and Coosaw Preserve you'll find this meticulously maintained home, load... 

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$490,000
Provided courtesy of Brand Name Real Estate
47 Photos 930 Holly Court Hanahan, SC 29410

930 Holly Court
Hanahan, SC 29410
Gold Cup Springs
Residential

MLS# 24007718 / Active
4 br, 1 ba, 1 Half Bath, 2136 Sqft

Step into this charming home and be greeted by beautiful hardwood floors that flow seamlessly through the living room, hallway, and all four bedroo... 

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$425,000
Provided courtesy of NextHome The Agency Group
53 Photos
Open House: Tomorrow 10:00am - 1:00pm
4018 Stockbridge Drive Charleston, SC 29414

4018 Stockbridge Drive
Charleston, SC 29414
Village Green
Residential

MLS# 24007716 / Active
4 br, 2 ba, 1 Half Bath, 2496 Sqft

This beautiful 4 bedroom 2.5 bath home in West Ashley's desirable Village Green is awaiting your discovery! New roof in 2023! This majestic home wi... 

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$545,000
Provided courtesy of EXP Realty LLC
33 Photos 1201 Francis Marion Circle Moncks Corner, SC 29461

1201 Francis Marion Circle
Moncks Corner, SC 29461
Stony Landing
Residential

MLS# 24007715 / Active
4 br, 2 ba, 1 Half Bath, 2694 Sqft

Classic two story home located in the heart of Moncks Corner only minutes to shopping and dining. Only 3 miles to William Dennis Boat Landing on th... 

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$530,000
Provided courtesy of Coldwell Banker Realty
17 Photos 3379 Cypress Pond Road Walterboro, SC 29488

3379 Cypress Pond Road
Walterboro, SC 29488
Residential

MLS# 24007714 / Active
3 br, 2 ba, 1746 Sqft

For Comp Purposes Only. 

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$245,000
Provided courtesy of All Country Real Estate, LLC
52 Photos 7848 Montview Road North Charleston, SC 29418

7848 Montview Road
North Charleston, SC 29418
The Park At Rivers Edge
Residential

MLS# 24007712 / Active
3 br, 2 ba, 1 Half Bath, 1700 Sqft

Welcome home to 7848 Montview Road, a beautifully updated end-unit townhome nestled in the sought-after gated community of The Parks at River's Edg... 

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$317,000
Provided courtesy of Coldwell Banker Realty
9 Photos 134 Darby Meadow Lane Drive Ridgeville, SC 29472

134 Darby Meadow Lane Drive
Ridgeville, SC 29472
Timothy Lakes
Residential

MLS# 24007708 / Active
3 br, 2 ba, 1 Half Bath, 2150 Sqft

PROPOSED CONSTRUCTION: Introducing the Mercer at Timothy Lakes. Find your very own slice of paradise in the community of Timothy Lakes. Located nea... 

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$386,900
Provided courtesy of Carolina One Real Estate
22 Photos 9275 Asycough Road Summerville, SC 29485

9275 Asycough Road
Summerville, SC 29485
Wescott Plantation
Residential

MLS# 24007704 / Active
2 br, 2 ba, 1240 Sqft

The minute you walk in this gorgeous garden home, you are greeted with relaxing water views right outside your door. This spacious 2 bedroom, 2 bat... 

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$315,000
Provided courtesy of AgentOwned Realty
30 Photos 604 Magnolia Walk Edisto Island, SC 29438

604 Magnolia Walk
Edisto Island, SC 29438
Wyndham Ocean Ridge
Residential

MLS# 24007702 / Active
3 br, 2 ba, 1285 Sqft

Welcome to your dream getaway at this resort-style laidback beach house in Wyndham! Located just three blocks from the picturesque Edisto Beach, th... 

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$585,000
Provided courtesy of Keller Williams Realty Charleston
40 Photos
Open House: Sat Mar 30th, 12:00pm - 2:00pm
1753 Winfield Way Charleston, SC 29414

1753 Winfield Way
Charleston, SC 29414
Carolina Bay
Residential

MLS# 24007700 / Active
4 br, 3 ba, 2292 Sqft

Welcome to your new home directly across the street from Carolina Bay Park! This peaceful retreat is nestled in the perfect location in highly soug... 

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$625,000
Provided courtesy of Keller Williams Realty Charleston
43 Photos
Open House: Sat Mar 30th, 12:00pm - 2:00pm
240 High Hill Drive Moncks Corner, SC 29461

240 High Hill Drive
Moncks Corner, SC 29461
High Hill
Residential

MLS# 24007699 / Active
3 br, 2 ba, 1555 Sqft

This is the one you've been waiting on! Privacy, No HOA, large yard, Detached workshop, Privacy fencing, Backs to woods, Vaulted ceiling and a Wood... 

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$350,000
Provided courtesy of Synergy Group Properties
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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