I'm considering a short sale on my investment property.

Although I am up to date with all payments, it has become a hardship and burden and I find that I cannot pay other bills due to this mortgage.

I spoke with a loss mitigation expert and he assures me that the bank should approve a sale based up my circumstances.

My concern is the 1099 C issued at sale. My accountant told me that since I have been using this as rental property I will be able to deduct most or all of the amount on the 1099C since I have been using depreciation.

I need some reassurances since the amount would be in excess of $100,000 and if I had to pay ordinary income taxes on this, it would further devastate me.

Any help is appreciated, thanks!

You need to speak with a local tax professional, preferably an enrolled agent or CPA who routinely prepares tax returns (not all CPAs do tax work).

The circumstances of your situation are simply too complex to properly address on this forum, because we do NOT have a complete, holistic view of your finances to give proper advice.