Taxpayer has a timeshare that was foreclosed in 2009. I understand a foreclosed property has to be reported as a sale to the lender. Does he report the 'sale' on Form 4797? He will have a loss and the loss would become deductible if it is from Form 4797. But the problem is that it was a timeshare for personal use and the loss shouldn't be deductible. I am thinking to report it on Schedule D and mark it as personal loss (my program let me do that) and so the loss won't be deductible. I would like to know your opinion.
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