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    mistystar's Avatar
    mistystar Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Jan 22, 2010, 04:00 PM
    Foreclosing on rental property and cap gain implications
    Hi,
    I may need to foreclose on my rental property that I have owned for 15 years.

    The property appreciated over the years quite a bit. Since I am unable to sell the property in this down market and do a 1031 Exchange to shelter cap gains taxes, what happens if I foreclose? Am I still obligated to pay the taxes?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Jan 22, 2010, 05:01 PM

    First, you don't foreclose. The lender holding the mortgage on the property forecloses. If the property has appreciated why are you having a problem selling?

    As long as you are the owner you are responsible for the taxes.
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