Many commercial real estate investors do not realize that foreclosure on their property will most likely result in being taxed at capital gains rates.  This is because the IRS considers the foreclosure to be a sale of the property to the lender for the amount of the loan balance.  Such investors have said they don't believe it.  How can I be taxed if I just lost my entire investment?  That is because they have depreciated the property and find that the adjusted tax basis is well below the…