The clients purchased a one bedroom condo in 2004 and has not refinanced or taken an equity loan on it. In 2008 they had a child and moved into a two bedroom apartment and leased the condo. They could not rent the condo for enough to cash flow it and sold it in a short sale for $100,000 less than they owed. Will all of this be income?
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It appears the intent was to convert to rental. Did they treat it as rental prop on the 2008 return? Depreciate? Are they in bankruptcy or insolvent? Will the bank cancel the debt and send a 1099?Last edited by Burke; 08-28-2009, 03:07 PM.
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