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Several years ago, Taxpayer purchased a building for $300,000 by paying $50,000 in cash and...

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Accounting

Several years ago, Taxpayer purchased a building for $300,000 by paying $50,000 in cash and borrowing $250,000 as a mortgage loan. This year when the building was valued at $200,000 and the outstanding balance on the mortgage loan was $250,000, Taxpayer and lender agreed to reduce the loan balance to $175,000. Determine the amount that Taxpayer must include in income as the result of this debt forgiveness according to 2022 tax rates

$75,000

$50,000

$0

$25,000

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