Client's rental property was foreclosed on by the lender and locks changed in 2011. Final paperwork is due to be completed by end of this month. There is a potential for a 2012 1099-C from this lender. Second mortgage lender settled with our client in 2011 and issued a 1099-C. We are gathering information to determine if insolvency existed. There are substantial passive losses that have accumulated over time that we would like to be able to report in 2011 along with the disposition of the tax asset. Would appreciate feedback from those more well versed on whether we can consider this as a 2011 transaction and recognize the disposition and the passive losses to help offset the potential COD income even though there may be more COD income in 2012. Thank you.