Question: Lyle Company owns commercial real estate with a 360 000 initial

Lyle Company owns commercial real estate with a $360,000 initial cost basis and $285,000 accumulated straight-line depreciation. The real estate is subject to a $120,000 recourse mortgage and has an appraised FMV of only $100,000. The mortgage holder is threatening to foreclose on the real estate because Lyle failed to make the last four mortgage payments. Determine the tax consequences of foreclosure assuming that:
a. Lyle must pay $20,000 cash to the mortgage holder in full satisfaction of its recourse debt.
b. The mortgage holder agrees to accept the real estate in full satisfaction of the recourse debt.

View Solution:


Sale on SolutionInn
Sales0
Views61
Comments
  • CreatedNovember 03, 2015
  • Files Included
Post your question
5000