Did you suffer a short sale or foreclosure on your home? This can significantly affect your taxes. Find out what you need to report, along with the wider impact of events like these.
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What effect does a home foreclosure or short sale have on your taxes?
For tax years through 2025, forgiven debt from a foreclosure or short sale of your primary residence is exempt from taxes. Your lender should send you Form 1099-C when your home is foreclosed on, which will have the information you need to determine your taxable amount. The amount of debt forgiven is the lesser of the original loan amount or $325,000 ($750,000 if married filing jointly).
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