Need help on short sales

Hello,

About 2 years ago my Wife and I bought a second home for 285,000 and began to rent it out. Unfortunately we have dealt with nothing but headaches from the prior tenants to the ones that are now currently occupying the home and there was a period in between where the house was vacant for so long that our savings are almost gone in order to keep the payments on the house current. The house has now been on the market for 319,000. We never profited any money from the rental and had to pay money out of pocket to make full mortgage even after the tenants monthly rent was recieved. We have never been late on payments but realistically know we cannot afford this home. We were brought an offer to put the home up for a short sale instead of having it foreclosed. My question is. In the case this all goes through will I have to pay taxes? And what other things should I expect? Any help is very much appreciated. Thanks in advance.

see http://www.ehow.com/how_8132_short-sale.html