AboutJohn Stancil, CPA Expertise I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Society of Tax Professionals, and the Institute of Management Accountants.
Experience I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper.
Expert: John Stancil, CPA Date: 7/11/2008 Subject: Deed in Lieu of Foreclosure on Investment Property
Question I saw your answer to Shannan regarding a similar issue we have, except that our deed in lieu is on investment property. As debt that is canceled or forgiven is considered taxable income, can one still qualify for exclusion of gain from the sale even though it is not our primary residence. No rental income or anything was ever made on the property - it was just a bad deal gone wrong. If so, how/where can I find out what qualifies as an exclusion of gain.
Thanks,
Daphne
Answer Daphne,
Thanks for your question.
Since it was not your primary residence you are not eligible to exclude the gain from forgiven debt. As it was investment property you may be able to offset the gain with a loss on the "sale" of the property.
