Foreclosure & Tax

I understand Cancellation of Debt Income is not taxable if loan was a non-recourse loan for purchase of a personal residence. Would this be true for purchase of a Rental property as well or would a cancellation of debt income be taxable for a Rental property with a non-recourse loan?

Also, I understand that unlike for personal residence, gain on sale due to foreclosure of a rental property does not have a $250,000 exclusion if the requirement of 2 out of 5 years as a personal residence is not met. So gain would be taxable. Is this correct?

Thanks again.

Reply to
Vijay Sharma
Loading thread data ...

Yes, any gain would be taxable in the situation you describe as would COD income.

Reply to
Bill Brown

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.