taxes - selling investment property for a loss

[Brian Essex]

I consider myself a real estate professional, I put well over 750 hours per year buying, selling, maintaining and managing my own real estate as well as real estate for others.

That being said, does a real estate loss affect me differently than other tax payers? I believe there is a distinction (I'm viewed by the IRS as a "real estate professional")

I think I may short sell an investment property I own in CA and expect to sell it for 60K-70K less than what I owe. I expect the lender to issue me a 1099 for the loss since it is not my primary residence and lender recourse on the loan.

But…

The same home was purchased for 204K and 30K was put into it so the loss sustained by me on the investment property will be around 135K. (adjusted for deprecation write offs taken over the last 3 years)

My question is regarding how the taxes will be handled if this were to occur, would I be able to offset the 1099 short sale loss received from the lender by the real estate investment loss?

Brian