In 2000,Michael Purchased Land for $100,000

question 81

Multiple Choice

In 2000,Michael purchased land for $100,000.Over the years,economic conditions deteriorated,and the value of the land declined to $60,000.Michael sells the property in this year,when it is subject to a $30,000 nonrecourse mortgage.The buyer pays Michael $34,000 cash and takes the property subject to the mortgage.Michael incurs $5,000 in real estate commissions.Michael's gain or loss on the sale is

• A)$4,000 gain.
• B)$1,000 loss.
• C)$36,000 loss.
• D)$41,000 loss.

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Definitions:

Disputed Debt

A debt that is not agreed upon by the debtor and creditor, often leading to legal action or negotiation for resolution.

Illusory Promise

An agreement that appears to be a contract but lacks the necessary elements to bind the parties, often due to vague or unenforceable terms.

Statute of Limitations

Laws prescribing the time limits within which legal proceedings may be initiated.

Discharged in Bankruptcy

The legal status of having been released from the obligation to repay most or all debt, under bankruptcy proceedings.