Question: Indicate whether the following statements are True or False regarding the tax treatment of the discharge of indebtedness. a. If the creditor reduces the debt

Indicate whether the following statements are "True" or "False" regarding the tax treatment of the discharge of indebtedness.

a. If the creditor reduces the debt as an act of love, affection, or generosity, the debtor has simply received a nontaxable gift.

b. In many situations, the Code allows the debtor to reduce his or her basis in the assets by the realized gain from the discharge of indebtedness.

c. A transfer of appreciated property (fair market value is greater than adjusted basis) in satisfaction of debt is an event that triggers the realization of income.

d. A shareholder's cancellation of the corporation's indebtedness to him or her usually is considered a taxable transaction.

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