With more and more homes being sold in the Myrtle Beach real estate market under the banner of a Myrtle Beach short sale its becoming more important that all sellers of none primary loans be aware of the risk of capital gains. If a sellers home is sold on the short sell market and it is not the primary residence of the seller the lender can and often does issue a 1099 tax form for the remainder of the original loan. This goes under capital gains taxes and the seller will owe taxes on the amount. The lender sends these out to show a loss on the property but a gain for you. For example, if you had a loan for the original amount of $500,000.00 and you were force to sell short sell for a number of reasons and the lender excepted an offer of $250,000.00, you can be liable for the $250,000.00 of the original loan amount in capital gains taxes. Needless to say this could run in the thousands of dollars in added taxes depending on the amount of capital gains. This only applies to non-primary homes or second homes. In 2007 President Bush signed into law the forgiveness clause for primary residences so no capital gains can be added to your home. Do lenders have to disclose that they will be sending a 1099 if you decide to short sell? NO. If you decide that you must short sell and it's not your primary residence you might want to see if you can change your primary residence first.

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