Tax consequences of foreclosure and capital gains.
ADDITIONAL INFORMATION: My mom passed away in September 2014. Her mortgage co filed foreclosure a month later. $74,000 was owed on the original debt, but unpaid taxes and fees made it closer to $104,000. Property sold for a profit in June 2016 and her estate received a check for $10,000. Mortgage co reported original debt of $74,000 and sale price of $114,00, meaning it looks as though her estate earned $40,000 instead of the $10,000 received.