Question: Question 16 James Smith property is foreclosed. He is not bankrupt or insolvent. At the time of foreclosure, the propertys fair market value was $4,000,000.

Question 16

James Smith property is foreclosed. He is not bankrupt or insolvent. At the time of foreclosure, the propertys fair market value was $4,000,000. The non- recourse mortgage balance is $4,500,000/ What is the cancellation of debt income amount?

$4,500,000.

$4,000,000.

$500,000.

$425,000.

None of the above.

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