And I only mentioned the 1031 exchange, because he didnt specify if this was his primary home...I never assume anything on here =)....thats why I advised him to check with his financial advisor on whether or not this could be applicable.
If you have no gains you wouldn't have anything to exchange - a 1031 exchange is for investment property and capital equipment only, never for a personal residence.
To protect gains in a personal residence one would look to a Deferred Sales Trust or some such vehicle.
The long and short of it is if you make no money you pay no taxes.
What you might be talking about is when you sell short you can be responsible for taxes on the amount that the lender forgives. That too is being done away with.
if you bought 2 years ago, you probably wont make a profit on the sale. Capital gains taxes is applicable when there is profit. On the off chance there is a profit, you should look into a 1031 exchange if you are thinking of buying something else upon the sale of your condo. Consult your tax advisor or financial advisor on how this would work for you.
I'm a Realtor, not an accountant, but I have attached a link that may answer your question. If you sell for less than you paid, I don't believe you pay since you didn't have a gain. It would be best to talk with an accountant for details.
Hope this was helpful.