The bank forecloses on Lisa's apartment complex.The property had been pledged as security on a nonrecourse mortgage whose principal amount at the date of foreclosure is $750,000.The adjusted basis of the property is $480,000, and the fair market value is $750,000.What is Lisa's recognized gain or loss?
A)$270,000
B)($750,000)
C)$0
D)($480,000)

Question

Quizplus · Accepted Answer

Lisa's recognized gain is calculated as the difference between the amount realized from the foreclosure ($750,000) and the adjusted basis of the property ($480,000), resulting in a gain of $270,000.

The Bank Forecloses on Lisa's Apartment Complex