With the number of foreclosures on the rise, many taxpayers who cannot refinance their mortgages are considering short sales. Evaluate the tax implications of selling short and any future consequences to the taxpayers. Instead of selling the property in a short sale, discuss the consequences of foreclosures and abandonments, and the potential for a gain or loss if the house is later sold by the bank. Discuss tax planning opportunities to mitigate the impact of either of these two options