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This Condo was an investment and I have never lived there. My accountant seems to think that I won't have a tax liability but I don't trust his judgement.
I understand about the 1099's that will be issued. I have been a Realtor for 18 years. BUT in my particular situation - I bought an investment condo in 2005 for $500,000 and 10% down. I am unable to make payments and it is in foreclosure. When the bank eventually sells the condo (for about $200,000) will I have a tax liability? ($450,000 1st and 2nd MINUS $200,000 sales price) will I have any tax liability? The 1099 will probably be for around $250,000 - the total debt of $450,000 MINUS the probable sales price of $200,000. My tax BASIS on this home is $500,000, the purchase price in 2005.
I have accepted this answer but would appreciate an knowing if I will owe tax.