John was having difficulties making a payment on a loan to a business creditor and the...

 

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John was having difficulties making a payment on a loan to a business creditor and the creditor is willing to forgive part of the balance of $250,000 remaining on the loan. Prior to any forgiveness of debt, John listed assets worth $500,000 and liabilities of $550,000. What is the maximum amount the creditor can forgive without John having to recognize any taxable income? DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER! John was having difficulties making a payment on a loan to a business creditor and the creditor is willing to forgive part of the balance of $250,000 remaining on the loan. Prior to any forgiveness of debt, John listed assets worth $500,000 and liabilities of $550,000. What is the maximum amount the creditor can forgive without John having to recognize any taxable income? DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!

Answer rating: 100% (QA)

Total Assets 500000 Total Liabilities 550000 LiabilityCreditor 2... View the full answer