Purchasing Mortgage Notes That Show Losses

[Andrew Clark]

Recently I asked a question if there are ways to minimize my capital gains tax on my primary residence as I will only be there for a year before selling. I received a response that I wanted some additional feedback on and hopefully get some more clarification.

One way to offset capital gains is with capital losses. There’s someone I was speaking to that knows someone who sells mortgage notes for basically pennies on the dollar. These notes show capital losses. So hypothetically speaking if I were to buy one of these notes for $5k that shows $100k losses, would I be able to offset my capital gains tax on that?

Super new to mortgage notes - so I won’t be offended if you dumb down the answer for me. TIA