I will be doing a 1041 for a probate estate and it appears there will be a foreclosure against the estate by a lender.  The property was not a primary residence of the decedent, but rather a rental/investment property.  The heir is concerned that either he or the estate will be taxed on the COD income.  I have only found one article that addresses this issue and the author seemed to indicate that ordinary income would be the result.  I am looking for any information that might indicate otherwise.