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)
E)None of these

Question

Quizplus · Accepted Answer

Amount realized $750,000
Adjusted basis (480,000)
Realized gain $270,000
Recognized gain $270,000
The amount realized includes the amount of the nonrecourse mortgage.

The Bank Forecloses on Lisa's Apartment Complex