100. LO6 Determine the amount of income that must be recognized in each discharge of indebtedness situation that follows.
a. Marvin owes Central State Bank $80,000. The bank agrees to reduce the debt to
$60,000. Prior to the debt reduction, Marvin’s assets total $350,000 and his liabil- ities are $330,000.
b. Assume the same facts as in part a, except that Marvin’s liabilities are $400,000 before the forgiveness of debt.
c. Assume the same facts as in part a, except that the debt is a mortgage on his princi- pal residence.
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