Sam also owned a condo on the beach which he used as his occasional sanctuary from his busy life. He purchased the condo for $300,000 in 2020 from Beach Front Bargain Hunt with a loan he secured from a local credit union. The condos value dropped to $150,000 in 2021 and is now worth $220,000. Sam, wanted to walk away from the property because he didnt want to keep investing in a property that was losing value. When the mortgage was $280,000, Sam agreed to the credit unions offer to adjust the mortgage amount to $220,000 to keep his ownership. Discuss the tax or potential income tax consequences for each situation. Provide a full and detailed analysis with proper authority cited to any IRC provisions or applicable income tax case law. Assume that they filed a joint tax return.