Refer to the facts in the preceding problem but assume
Refer to the facts in the preceding problem but assume that Aldo’s basis in the investment land was $100,000 rather than $61,000.
a. Compute Aldo’s recognized loss in year 1.
b. In year 4, Aldo pledged the note received from the purchaser as partial collateral for a $75,000 bank loan. The unpaid principal at date of pledge was $56,000. Deter-mine the tax consequences of this pledge to Aldo.
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