Foreclosed rental...how to handle depreciation recapture

[AZ-Tax]

My client had their rental forclose on them in 2007. Took depreciation on rental in 2006. Now what?

[solomon]

My client had their rental forclose on them in 2007. Took depreciation on rental in 2006. Now what?

Unrecaptured 1250 gain subject up to 25% tax rate.

[Davc]

Insufficient data. Need numbers, type of debt, and if recourse, was any forgiven.

[myerstaxes]

You have to

go through the entire excercise of reporting the foreclosure as a sale...using the figures provided to you about the loan balance and the FMV of the property...Or if it was subsequently sold, what that selling price was...No straight forward answer, you have to do the numbers...If you are lucky the FMV and loan balance will not produce much if any COD, but the depreciation recapture will be what it is "allowed or allowable"...