I had a rental property which was foreclosed on by the HOA in 2011 for a minimal sales price in the low thousands. The lender has not aken any action yet so there is currently no cancelled debt to deal with. The original purchase price of the property was over $250,000.
What is the correct way to deal withe the Taxes for 2011. Is it simply a loss on disposition which is deductible since the property is a rental and has been depreciated over the past few years? and then wait and see what the lender does?
Please provide any assistance you can. I will provide additional information as needed.