What effect does a home foreclosure or short sale have on your taxes?
If your home was foreclosed or you had a short sale this year, you need to report this on your tax return – the amount of debt forgiven by the loan holder is considered income.
For tax years prior to 2017, forgiven debt from a foreclosure or short sale of your primary residence is exempt from taxes. Beginning January 1, 2018, unless Congress approves an Extenders bill, the amount of income forgiven at foreclosure is taxable. Your lender should send you Form 1099-C when your home is foreclosed upon – this form will have the information you need to determine your taxable amount.
Why Jackson Hewitt®?
We’re not tax machines. We’re Tax Pros who are happy to answer all of your questions, provide you with tips, and help you get smarter about your money.
We’ve seen it all — from the simple to the complex — and we’ll get you every credit and deduction you deserve. Our returns come with our Maximum Refund and Lifetime Accuracy guarantees – we’ll get it right or we pay you.
Our Tax Pros are there to help wherever you are. We’re conveniently located and offer a confidential, secure space to discuss your taxes. We’ll even get you started in advance with document drop-off or upload.