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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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Real Estate
Tax Implications of a Real Estate Foreclosure or Short Sale
What effect does a home foreclosure or short sale have on your taxes?
For tax years through 2020, 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. In tax years beginning January 1, 2021, the amount of income forgiven at foreclosure or a short sale may be taxable.
For tax years through 2020, forgiven debt from a foreclosure or short sale of your primary residence is exempt from taxes.
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