[DJA90CDA]

I had to file bankruptcy about 18 months ago. I had two condo properties along the gulf coast that had fallen in value dramatically and the Real Estate market was dead. They were taken back by the banks, before they could be sold. I had a couple hundred thousand in real equity that went poof. Can I write any of the equity losses off on my taxes as losses carried forward?

[MukatA]

No, for personal property you can not claim capital loss. If the bank canceled your debt in case of recourse liability it is reported as income.

[wnhough]

QUOTE," Can I write any of the equity losses off on my taxes as losses carried forward? "-----No, you can't. Here I am giving you a very simplified example. Assume that You borrow $10,000( $5,000 for each condo unit) and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000($5,000-$1,000=$4,000 each condo unit), which generally is reported as taxable income to you.

But, remember this; cancellation of your debt income, $8,000 in this particular case, is NOT always taxable income to you.
There are some exceptions. The most common situations when cancellation of debt income is not taxable involve: according to"The Mortgage Forgiveness Debt Relief Act and Debt Cancellation,"
Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
Bankruptcy: Debts discharged through bankruptcy are not considered taxable income; I bet, as you sad, this is your case.
Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
No taxable income to you, no deduction.

[wnhough]

Please visit the website The Mortgage Forgiveness Debt Relief Act and Debt Cancellation