Otto purchased a new car from Dealer for $20,000. He paid for the car by borrowing $15,000 from Dealer. After a few months, Otto realized there were some serious flaws with the car--he kept having to return the car to Dealer for repairs. Otto threatened to sue Dealer because of all the car problems, so Dealer agreed to forgive $4,000 from the loan that Otto owed to Dealer. 

How much gross income must Otto report? 

Answer rating: 100% (QA)

In this scenario Otto purchased a car from Dealer for 20000 and ... View the full answer