I sold my restaurant on a short sale in 2012. I will have a net capital loss as well as cancellation of debt income (CODI), but not in the same year. I will get a 1099 from the bank for CODI. The problem is that I won't get it for 5 years, after I pay off my SBA work-out. Can I report CODI in 2012 to reduce the basis and offset it against the capital loss without the 1099 in hand? The bank is waiting until I pay off the negotiated settlement before issuing the 1099. I won't be able to use insolvency to offset it when it comes in 5 years either.