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Thank you for your question.
Can you tell me what kind of investment property? as it a rental unit?
Thanks for getting back to me.
When box 4 is greater than box 2, there is no debt cancellation income, and you should not get a 1099C.
So you treate this as a sale useing form 4797:
the capitgal gains forumal represented by the form is:
Capital gains = FMV- (original cost of property + improvements, + major repairs - accumulated depreciation). the capital gains are taxed at 15%.
The accumulated depreciation is recaptured at 25%.
If you want to estimate this all, use the following calculator: