[azbobc]

Basically a situation was created where there was absolutely no income coming into my household. I immediately contacted my mortgage lender and spent the next 5 months trying to restructure my loan so there might be a possibility to continue making payments. Long story short they said no and I lost the home via foreclosure. I've looked at Schd-D and the instructions and even though it address home sales/exchanges/etc as a capital gains/loss issue it does not address foreclosure. However, since the foreclosure has directly effected my credit and is viewed as a 'debt' it seems logical to treat it as a 'capital loss'. Does this seem the correct way to deal with this tax-wise or is there a more appropriate form?If you choose to reply please have some tax or real estate experience. I've done taxes for over 25 years and was a real estate agent for a few years as well and this has even me wondering.*More info: the residence was in AZ, a state where lenders cannot pursue individuals for foreclosure losses.** Thx for the replies: Both merit acknowledgment. However... Even prior to my brief RE career the tax laws stated (at that time) there was only a one time exemption for capital gains from the sale of your home. Last time it effected me I believe the rule was changed to you only had to claim a capital gains from the sale of your home only if the gain exceeded $250k. Still... I am not referring to a "sale", that was covered in the 1040-D instructions. A "foreclosure" on the other hand was not.So at this point contacting a tax professional is probably in my best interest.