#Good news! The IRS has extended the tax deadline to April 18th! As long as you submit your federal return by midnight on 4/18/2018, you won't be considered a late filer for your federal return. Direct debit tax payments that are submitted with your federal return (or on the IRS website) by 4/18 are also considered timely filed ×

What are the tax effects of a foreclosure or short sale of my home?

You may owe taxes due to the foreclosure or short sale of your home, depending on the circumstances. 

Go to this section in Credit Karma Tax: Cancellation of Debt

According to the IRS, both foreclosures and short sales are considered taxable real estate transactions.

If the lender forgives all or part of the mortgage debt, the cancellation of the excess debt may count as taxable income and you should receive a Form 1099-C from the lender. The difference between the canceled debt amount and the fair market value of the property must be included in the gross income reported on your tax return unless an exception or exclusion applies. In certain circumstances, such as foreclosure of your primary residence when certain conditions are met, some or all of the cancellation of debt may not be taxable.
Source: irs.gov

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