Question: Vic who was experiencing financial difficulties was able to adjust

Vic, who was experiencing financial difficulties, was able to adjust his debts as follows. Determine the Federal income tax consequences to Vic.
a. Vic is an attorney. Vic owed his uncle $25,000. The uncle told Vic that if he serves as the executor of the uncle's estate, Vic's debt will be canceled in the uncle's will.
b. Vic borrowed $80,000 from First Bank. The debt was secured by land that Vic purchased for $100,000. Vic was unable to pay, and the bank foreclosed when the liability was $80,000, which was also the fair market value of the property.
c. The Land Company, which had sold land to Vic for $80,000, reduced the mortgage on the land by $12,000.

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  • CreatedMay 25, 2015
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