Blitza Inc

question 50

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) Statements a. and c. are true.

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Definitions:

Small-For-Gestational-Age

A term describing infants whose birth weight or length is significantly lower than the average for their gestational age.

Average Weight

A statistical measure that reflects the central or typical weight of a population or group.

Gestational Age

The age of an embryo or fetus (or newborn infant) starting from the first day of the mother's last menstrual period, typically used to predict birth date and assess developmental milestones.

Transition

The process or period of changing from one state or condition to another.