Eduardo and Ana Maria Own Their Home,purchased in 2002 for $600,000.They

Eduardo and Ana Maria own their home,purchased in 2002 for $600,000.They financed the purchase with a mortgage for $550,000.In 2011 they bought a vacation cottage for $100,000,financed with a second mortgage of $95,000 on their home.In 2013,they fall upon hard times and cannot make the mortgage payments.The mortgage company sells their home for $425,000 and the cottage for $85,000.At the time of the sale,the mortgage balances are $450,000 on their home and $90,000 on their second mortgage.The mortgage company cancels the remaining debt.How much income do Eduardo and Ana Maria recognize on the cancellation of their debt?

A) $ -0-
B) $ 5,000
C) $15,000
D) $25,000
E) $30,000