Blitza Inc

question 102

Multiple Choice

Blitza Inc. owned real property used for 12 years in its business that was subject to a $294,500 nonrecourse mortgage. Blitza failed to make timely mortgage payments, so the creditor foreclosed. At date of foreclosure, Blitza's basis in the property was $300,000, and the property's appraised FMV was $260,000. Which of the following statements is true?

• A) Blitza has no legal obligation to settle the $34,500 unpaid balance of the mortgage.
• B) Blitza recognizes a $40,000 Section 1231 loss.
• C) Blitza recognizes a $5,500 Section 1231 loss.
• D) Both Blitza has no legal obligation to settle the $34,500 unpaid balance of the mortgage and Blitza recognizes a $5,500 Section 1231 loss is true.

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Definitions:

Lithium

A chemical substance employed to manage bipolar disorder by balancing mood fluctuations.

Bipolar Disorder

A mental health condition characterized by extreme mood swings that include emotional highs (mania or hypomania) and lows (depression).

E-therapist

A professional who provides psychological support and counseling services through digital platforms, such as video calls or messaging apps.

Hand-deliver

To hand-deliver means to personally deliver something directly to the recipient, rather than using a third party or postal service.