Posted by John Hyre on September 17, 2008 at 07:47:58:
Depends on numbers & facts. If the property is your personal residence and has not been used for business, avoiding tax is almost certain. If you are an investor, it depends on numbers…rules of thumb for investor:
If you had cash-out financing and took the money, you will owe tax unless you can show insolvency or get debt cancelled as part of bankruptcy.
If you bought the property some time ago and have taken lots of write-offs over the years (e.g. depreciation), you will probably owe something, with insiolvency or bankruptcy helping to mitigate.
If you bought the property for a large sum & it is worth much less (e.g. Florida!) and you did not take cash out, likely little or no taxable gain.
Those are mere generalizations based on experience, ultimately it will be the exact numbers, facts & circumstances that will decide how the taxes pan out.
John Hyre