Blake purchased a residential rental property for $245,000. He made a down payment of $20,000 and secured a nonrecourse loan for $225,000. Blake defaulted on the loan when the balance of the note was $210,000 and his adjusted basis in the property after depreciation claimed was $223,000. Fair market value of the property at the time of foreclosure was $205,000.

What is Blake's gain or loss from the foreclosure?

Answer rating: 100% (QA)

SOLUTION When a borrower defaults on a nonrecourse loan the lender can seize the property used as co... View the full answer