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Real Estate

Tax Implications of a Real Estate Foreclosure or Short Sale

Did you suffer a short sale or foreclosure on your home? This can have huge effects on your taxes. Find out what you need to report, along with the wider impact of events like these.

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,  the amount of income forgiven at foreclosure or a short sale may be 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.


If you’ve had a short sale or foreclosure of your home this year, you need to report it on your tax return – the debt forgiven by the loan holder may be  considered income.

Why Jackson Hewitt®?

We’ll work hard for you

Our Tax Pros will answer your questions, provide tax tips, and help you get smarter about your money.

We know our stuff

Jackson Hewitt is a leader in the tax industry, having prepared millions of tax returns in more than 35 years.

We’ll make it easy

We’re committed to helping you, fast and efficiently. Taxes done how you want and when you want.