We sold several rental properties this year on a short sale. We were able to take an accelerated depreciation over the last ten years because of where the houses were located (Go-Zone). The lender has chosen to forgive the debt. I am trying to figure out what we will face in our tax situation at filing time next year.
Purchase Price $45,000
Sales Price $17,000
Accelerated Depreciation $25,000
Forgiven Debt $28,000
Any tax experts have an idea what the tax situation will look like?