George bought Blackacre for $500,000. George put $50,000 in cash and the rest of the purchase is financed by a $450,000 nonrecourse loan. George claims $100,000 in depreciation deductions, 7 years later when Blackacre is worth only $400,000 George transfers Blackacre to Jerry who takes it subject to outstanding nonrecourse debt of $425,000. What are the tax consequences to George?

Answer rating: 100% (QA)

Answer Heres a breakdown of the tax consequences for George in this scenario 1 Purchase and Loan Cos... View the full answer