Tax liability for foreclosed rental properties?

[lss177]

Filing Ch 7 next week; had four rental houses that foreclosed in 2010. Got a 1099-A that shows FMV and debt was about the same on each house, around $83K each. Have never received any 1099-C's for them.

Filing 2010 tax return, looks like I have to report the four houses as "sold" and show big gains due to recaptured depreciation. This will give me a LARGE tax bill that I cannot afford.

Anyone have advice on how to handle this in conjunction with the Ch 7 filing?

Thanx!

[porkchopcash]

I will have a similar situation.
Did you read the discussion we just had in this thread yet

http://www.bkforum.com/showthread.php?67695-for-real-estate-Investors-regarding-depreciation-during-foreclosure

[lss177]

Similar but not the same; my four properties have already foreclosed prior to my filing a Ch 7 next week.

[lss177]

Bumpity-bump...

[justbroke]

Filing Ch 7 next week; had four rental houses that foreclosed in 2010. Got a 1099-A that shows FMV and debt was about the same on each house, around $83K each. Have never received any 1099-C's for them.

Filing 2010 tax return, looks like I have to report the four houses as "sold" and show big gains due to recaptured depreciation. This will give me a LARGE tax bill that I cannot afford.

Anyone have advice on how to handle this in conjunction with the Ch 7 filing?
!

You should see a professional tax accountant and a good bankruptcy attorney. You are going to have recaptured depreciation and other issues as well, which usually leads to a capital gain on the investment.

Personally, I think you have a potential issue since this will still end up being taxable, and insolvency won't help you since it may be seen as a gain. Do you know if your 1099-A has the Box 5 checked ("Check here if the borrower was personally liable for repayment of the debt")?