regarding taxes on short sale

[David Carreno]

Hi, I am recently facing a possible short sale, the property is about 35,000 under the water and one thing a firm I talked to told me that if the bank accepts the offer and the short sale goes through, that that I would have to pay taxes on the remaining balance as if it were a capital gain, which makes no sense to me.
Anybody knows anything regarding the subject?
thanks

[Jon Holdman]

Call you lender(s) and explain the situation and see what they might be willing to do. Paying taxes on any forgiven debt is probably inevitable, though, short of declaring bankruptcy.