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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45 Photos 212 Tyner Trail Summerville, SC 29486

212 Tyner Trail
Summerville, SC 29486
Tyner Trail
Residential

MLS# 26019444 / Active
n/a br, 2 ba, 1 Half Bath, 1767 Sqft

Welcome to 212 Tyner Trail, a beautifully maintained 3-bedroom, 2.5-bathroom townhome offering 1,767 sq. ft. of comfortable living space. The open-... 

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$290,000
Provided courtesy of AgentOwned Realty
56 Photos 1111 Fitzgerald Court Summerville, SC 29485

1111 Fitzgerald Court
Summerville, SC 29485
Summers Corner
Residential

MLS# 26019443 / Active
4 br, 3 ba, 1 Half Bath, 3047 Sqft

**Sellers offering $5k towards buyers closing costs!!* Why wait to build when you can move right in with more! Located in the highly sought after S... 

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$502,500
Provided courtesy of Realty ONE Group Coastal
46 Photos
Open House: Tomorrow 1:00pm - 3:00pm
522 Killdeer Road Summerville, SC 29486

522 Killdeer Road
Summerville, SC 29486
Nexton
Residential

MLS# 26019441 / Active
4 br, 2 ba, 1 Half Bath, 2772 Sqft

Welcome to 522 Killdeer Road, a beautifully maintained 4-bedroom, 2.5-bath home offering 2,772 square feet of thoughtfully designed living space. T... 

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$440,000
Provided courtesy of Carolina One Real Estate
75 Photos 1436 Kinglet Street Mount Pleasant, SC 29464

1436 Kinglet Street
Mount Pleasant, SC 29464
Cassina Heights
Residential

MLS# 26019439 / Active
5 br, 3 ba, 1 Half Bath, 3400 Sqft

Experience the pinnacle of new construction luxury in this meticulously designed 5 bed, 3.5 bath home. You`re welcomed by soaring 10 ft ceilings, c... 

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$2,625,000
Provided courtesy of BIG Realty, LLC
1 Photos 8831 Kellum Drive North Charleston, SC 29420

8831 Kellum Drive
North Charleston, SC 29420
Charleston Park
Residential

MLS# 26019438 / Active
4 br, 2 ba, 1 Half Bath, 1880 Sqft

Professional Photos Coming Soon! Welcome home to 8831 Kellum Drive, where generous living spaces and everyday comfort come together in this invitin... 

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$340,000
Provided courtesy of AgentOwned Realty Co. Premier Group, Inc.
14 Photos 2446 Cherokee Hall Lane Charleston, SC 29414

2446 Cherokee Hall Lane
Charleston, SC 29414
Myrtle Grove
Residential

MLS# 26019437 / Active
4 br, 3 ba, 1746 Sqft

Welcome home to this beautiful updated 4-bedroom, 3-bath in the heart of West Ashley! This move-in-ready home features newly installed cabinets & g... 

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$545,000
Provided courtesy of Bella Vita Homes

1908 NE Calvert Street
North Charleston, SC 29405
Chicora Place
Residential

MLS# 26019435 / Active
2 br, 1 ba, 719 Sqft

Investment opportunity!!! right across from an established Air-Bnb. 

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$175,000
Provided courtesy of Carolina One Real Estate
44 Photos
Open House: Today 11:00am - 1:00pm
17 8th Avenue UNIT 17c Charleston, SC 29403

17 8th Avenue UNIT 17c
Charleston, SC 29403
Wagener Terrace
Residential

MLS# 26019433 / Active
3 br, 1 ba, 1088 Sqft

Welcome to 17C 8th Avenue, a charming 3-bedroom, 1-bath home in the heart of desirable Wagener Terrace. With 1,088 square feet of thoughtfully desi... 

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$569,000
Provided courtesy of Dunes Properties of Chas Inc
75 Photos 1716 Bowline Drive Mount Pleasant, SC 29466

1716 Bowline Drive
Mount Pleasant, SC 29466
Dunes West
Residential

MLS# 26019431 / Active
5 br, 5 ba, 1 Half Bath, 5676 Sqft

Morning Golf. Afternoon Boating. Sunset by the Fire.Welcome to Waterfront Living at Its Finest.Set on 1.5 private acres along the deep waters of th... 

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$4,495,000
Provided courtesy of Engel & Volkers Charleston
1 Photos 1083 Wayfarer Lane Charleston, SC 29412

1083 Wayfarer Lane
Charleston, SC 29412
Bayview Farms
Residential

MLS# 26019430 / Active
3 br, 2 ba, 1526 Sqft

Enjoy this well kept home in beautiful and desirable Bayview Farms . The living room dining room combination has vaulted ceilings and a fireplace .... 

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$715,000
Provided courtesy of Carolina One Real Estate
22 Photos
Open House: Tomorrow 11:00am - 1:00pm
1102 Huger Street Moncks Corner, SC 29461

1102 Huger Street
Moncks Corner, SC 29461
Limerick Woods
Residential

MLS# 26019428 / Active
3 br, 2 ba, 1210 Sqft

Well maintained home located in the heart of Moncks Corner with no HOA! Featuring an open floor plan with vaulted living room ceilings making the a... 

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$320,000
Provided courtesy of Realty ONE Group Coastal
24 Photos 5340 Sumters Run North Charleston, SC 29418

5340 Sumters Run
North Charleston, SC 29418
River Chase
Residential

MLS# 26019427 / Active
3 br, 2 ba, 1798 Sqft

Welcome to 5340 Sumters Run, Brand-new custom luxury ranch! Jaw-dropping curb appeal welcomes you with premium front stone siding. Inside, a sun-dr... 

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$419,000
Provided courtesy of Beycome Brokerage Realty LLC
43 Photos 623 Barn Road Bonneau, SC 29431

623 Barn Road
Bonneau, SC 29431
Bonneau Estates
Residential

MLS# 26019426 / Active
4 br, 2 ba, 1800 Sqft

Welcome to 623 Barn Road in Bonneau, a beautifully updated 4-bedroom, 2-bath home offering the perfect blend of modern comfort and laid-back Lowcou... 

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$250,000
Provided courtesy of AgentOwned Realty Preferred Group
1 Photos
Open House: Today 10:00am - 12:00pm
106 Lucia Street Charleston, SC 29492

106 Lucia Street
Charleston, SC 29492
Codners Ferry Park
Residential

MLS# 26019424 / Active
4 br, 4 ba, 1 Half Bath, 2977 Sqft

Experience timeless Lowcountry charm the moment you arrive - a welcoming wraparound front porch and picturesque English garden with custom brick ma... 

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$1,750,000
Provided courtesy of Carolina One Real Estate
40 Photos 284 Spencer Circle Summerville, SC 29485

284 Spencer Circle
Summerville, SC 29485
Shady Oaks
Residential

MLS# 26019420 / Active
4 br, 3 ba, 1684 Sqft

***Ask about the possibility of receiving 1% reduction in interest rate and free refi.***Located in the Shady Oaks community of Summerville, this e... 

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$295,000
Provided courtesy of Matt O'Neill Real Estate
58 Photos 114 Poplar Circle Summerville, SC 29483

114 Poplar Circle
Summerville, SC 29483
Carl Knight II
Residential

MLS# 26019418 / Active
2 br, 2 ba, 1400 Sqft

Discover this contemporary home on just over an acre of wooded land with no HOA in desirable West Summerville. Built in 1984, the property offers p... 

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$350,000
Provided courtesy of Carolina One Real Estate
75 Photos
Open House: Thu Jul 9th, 3:00pm - 5:00pm
1980 Minott Street Charleston, SC 29412

1980 Minott Street
Charleston, SC 29412
Riverland Terrace
Residential

MLS# 26019416 / Active
3 br, 2 ba, 1504 Sqft

Classic Riverland Terrace charm meets exceptional Lowcountry waterfront lifestyle at 1980 Minott. Canopied beneath magnificent live oaks on a gener... 

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$1,375,000
Provided courtesy of Real Broker, LLC
20 Photos 1119 Island View Drive Mount Pleasant, SC 29464

1119 Island View Drive
Mount Pleasant, SC 29464
Harborgate Shores
Residential

MLS# 26019415 / Active
3 br, 2 ba, 1952 Sqft

Welcome to 1119 Island View Dr, a beautifully maintained home located on a corner lot in one of South Mount Pleasant`s most desirable communities w... 

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$975,000
Provided courtesy of The Cassina Group
66 Photos 2842 Maritime Forest Drive Johns Island, SC 29455

2842 Maritime Forest Drive
Johns Island, SC 29455
Kiawah River Estates
Residential

MLS# 26019414 / Active
4 br, 3 ba, 1 Half Bath, 3366 Sqft

Welcome to 2842 Maritime Forest! This newer construction custom home offers a blend of luxury, comfort, and exclusivity in one of the most sought-a... 

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$1,650,000
Provided courtesy of Akers Ellis Real Estate LLC
22 Photos 140 Blue Jasmine Lane Summerville, SC 29483

140 Blue Jasmine Lane
Summerville, SC 29483
Scotts Mill
Residential

MLS# 26019413 / Active
3 br, 2 ba, 1 Half Bath, 1639 Sqft

Welcome to 140 Blue Jasmine Lane! Located in the Scotts Mill neighborhood, this turnkey 3-bedroom, 2.5-bathroom home is completely move-in ready. T... 

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$355,000
Provided courtesy of Maven Realty
13 Photos 3000 Southern Pines Lane UNIT #242 Kiawah Island, SC 29455

3000 Southern Pines Lane UNIT #242
Kiawah Island, SC 29455
Residential

MLS# 26019412 / Active
3 br, 3 ba, 1 Half Bath, 2451 Sqft

Exciting opportunity to own a 1/9th interest at Timbers Kiawah Ocean Club & Residences. This luxury appointed 3 bedroom/3.5 bathroom residence offe... 

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$615,000
Provided courtesy of Timbers SC Real Estate Company, LLC
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