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
712 W Ashley Avenue
Folly Beach, SC 29439
Residential
MLS# 24014279 / Active
Preservation Opportunity at the Edge of America - Folly Beach, SC. Welcome to the ''Porgy House,'' a historic gem on Folly Beach, SC. Built in 1933...
Reduced -$300,000
138 Waddell Lane
Ridgeville, SC 29472
Harts Bluff
Residential
MLS# 24014195 / Active
Back on the Market - No Fault of the Sellers!Welcome to your future Waterfront Retreat on the higher side of the deep, scenic Edisto River--a rare ...
Reduced -$25,000
10 Briggs Street
Summerton, SC 29148
Residential
MLS# 24014178 / Active
With its historic charm and modern amenities, this 1910 home stands as a testament to the enduring allure of Southern living. A wrap around porch i...
Reduced -$28,000
2221 Oyster Catcher Court
Seabrook Island, SC 29455
Seabrook Island
Residential
MLS# 24013297 / Active
Rare opportunity to own one of the coveted North Beach Village homes. An exquisite property that promises a blend of luxury and tranquility in one ...
Reduced -$25,000
1721 Live Oak Park
Seabrook Island, SC 29455
Seabrook Island
Residential
MLS# 24013229 / Active
Beautiful unobstructed marsh and river front views. Crab and fish from your own shared dock. Enjoy some of the best sunset views across of Horsesho...
Reduced -$20,000
4426 Sea Forest Drive
Kiawah Island, SC 29455
Kiawah Island
Residential
MLS# 24013104 / Active
Wonderful opportunity to purchase a 3rd floor oceanfront villa beautifully remodeled and updated for a luxury Kiawah Island vacation property. Enjo...
Reduced -$80,000
205 Valley Street
Walterboro, SC 29488
Residential
MLS# 24013025 / Active
Welcome to 205 Valley St!! This historic home, built in 1914, offers approximately 4,174 sq. ft. on 1.01 +/- acres in the well-known Historic Hicko...
Reduced -$25,000
1613 Suffolk Drive
Moncks Corner, SC 29461
Pimlico
Residential
MLS# 24012965 / Active
4/28/25 update. Home is in Framing!!! Welcome to 1613 Suffolk Drive, Moncks Corner, SC 29461--an exquisite new construction home by Kingwood Homes,...
Reduced -$500
5 Middle Atlantic Wharf UNIT 3a
Charleston, SC 29401
French Quarter
Residential
MLS# 24012798 / Active
Factors Walk: the best there is in location, style, and maintenance-free luxury. Designed by Goff D'antonio Architects with historic Charleston as ...
Reduced -$550,000
5565 Colonial Chatsworth Cir
North Charleston, SC 29418
Summers Bend On The Ashley
Residential
MLS# 24011673 / Active
**Seller will pay 6 months of HOA fees on behalf of buyer with acceptable offer.** This inviting 3 bed/2 bath condo is tucked away in a quiet water...
Reduced -$5,900
614 E Cooper Avenue
Folly Beach, SC 29439
Residential
MLS# 24011046 / Active
Nestled among mature oaks and magnolias in the island interior, this spacious home feels like a treehouse! 614 E Cooper is a rare, spacious duplex ...
Reduced -$375,000
1955 Marsh Oak Lane
Johns Island, SC 29455
Seabrook Island
Residential
MLS# 24010904 / Active
Located in Bohicket Marina at Seabrook Island. Located on second floor with parking underneath. Panoramic views of Bohicket River and Marina. Close...
2128 Rookery Lane
Charleston, SC 29414
Croghan Landing
Residential
MLS# 24010894 / Active
BUYER'S CONTRACT ON THEIR HOME FELL THROUGH - KILLED FINANCING *Now this is a winner!! * When one encounters high quality, there will always be cer...
Reduced -$100,000
7666 Legare Road
Edisto Island, SC 29438
Cowpens
Residential
MLS# 24010393 / Active
KING'S GRANT HOUSE- GLORIOUS CREEKSIDE & DIRECT OCEAN VIEWS w/pedestrian access to Edingsville Beach. Almost total renovations in 2019 (See Feature...
Reduced -$103,000
466 Cedarview Road
Summerville, SC 29486
Cane Bay Plantation
Residential
MLS# 24010071 / Active
4.5% Assumable Mortgage. Welcome home to 466 Cedarview Road. Like new construction this home was built in 2022 and boasts 4 bedrooms and 2.5 bathro...
W Street
Folly Beach, SC 29439
Folly Beach
Residential
MLS# 24008260 / Active
Proposed construction on high lot on western side of Folly Beach. Elevated 3 bed, 3.5 bath with expansive water and Folly River views. Wrap around ...
1161 Oak Bluff Avenue
Charleston, SC 29492
Oak Bluff
Residential
MLS# 24007957 / Active
UNDER CONSTRUCTION! Estimated completion Aug 2025. The Virginia elevation F drive under plan backs to the marsh of the Wando River providing beauti...
Reduced -$35,000
1556 John Fenwick Lane
Johns Island, SC 29455
The Preserve At Fenwick Plantation
Residential
MLS# 24007335 / Active
Introducing a stunning new construction home nestled in a serene location on Johns Island. This 3430sqft residence offers modern luxury and conveni...
82 Mariners Cay Drive
Folly Beach, SC 29439
Mariners Cay
Residential
MLS# 24007082 / Active
82 Mariners Cay is a 1st floor Folly Riverside flat, situated in one of the most private locations in the community. This property has maple floors...
1157 Oak Bluff Avenue
Charleston, SC 29492
Oak Bluff
Residential
MLS# 24006489 / Active
New !! Finished!! Elevated Avondale F drive-under Marsh Front home! The Avondale continues to be a favorite! Bright and airy, this beautiful home h...
Reduced -$19,990
757 Backfield Road
Walterboro, SC 29488
Backfield
Residential
MLS# 24005917 / Active
Welcome to your own private oasis in the heart of the ACE Basin on Horseshoe Creek in Walterboro, SC. This stunning 2755 sf home sits on over 1 acr...
Reduced -$24,000
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 08-06-2025 11:51 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 2025 Charleston Trident Multiple Listing Service, Inc. All rights reserved.