Jolie Purchased Her Residence in 2012 for $500,000 by Borrowing

question 159

Multiple Choice

Jolie purchased her residence in 2012 for $500,000 by borrowing $450,000. In 2018, she becomes unemployed and can no longer afford to make the full monthly payment on the mortgage. When the mortgage balance is $430,000, the bank agrees to reduce her mortgage to avoid foreclosure. Jolie is insolvent before and after the mortgage reduction. What is Jolie's basis in her residence if the bank agrees to reduce the mortgage on the residence to $300,000?

• A)$- 0 -
• B)$300,000
• C)$370,000
• D)$430,000
• E)$500,000

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Definitions:

Variable Allowances

Adjustments in time estimates or costs to accommodate changes in work conditions or processes.

Normal Time

The standard duration that a task or activity is expected to take under normal working conditions.

Actual Average Time

The real measured time taken on average to perform a task or process, used in evaluating and planning efficiencies.

Portable Electric Saw

A mobile, power-driven tool used for cutting wood and other materials, essential in construction and woodworking.