$1.$Mortgagor purchases a parcel of land from Seller for $$100,000.$ Mortgagor borrows $$80,000$ from Bank and pays that amount and an additional $$20,000$ of cash to Seller giving Bank a nonrecourse mortgage on the land. The land is the security for the mortgage which bears an adequate interest rate.

$($b$)$Two years later when the land has appreciated in value to $$300,000$ and Mortgagor has paid only interest on the $$80,000$ mortgage, Mortgagor takes out a second nonrecourse mortgage of $$100,000$ with adequate rates of interest from Bank again using the land as security. Does Mortgagor have income when she borrows the $$100,000?$ See Woodsam Associates, Inc. v$.$ Commissioner, $198$ F$\mathrm{.}2$d $357(2$d Cir$\mathrm{.}1952).$

$($c$)$What is Mortgagors basis in the land if the $$100,000$ of mortgage proceeds are used to improve the land?

$($d$)$What is Mortgagors basis in the land if the $$100,000$ of mortgage proceeds are used to purchase stocks and bonds worth $$100,000?$

$($e$)$What result under the facts of $($d$),$ above, if when the principal amount of the two mortgages is still $$180,000$ and the land is still worth $$300,000,$ Mortgagor sells the property subject to both mortgages to Purchaser for $$120,000$ of cash? What is Purchasers cost basis in the land?

$($h$)$What results to Mortgagor under the facts of $($d$),$ above, if the land declines in value from $$300,000$ to $$180,000$ and Mortgagor transfers the land by means of a quitclaim deed to Bank? See Parker v$.$ Delaney, $186$ F$\mathrm{.}2$d $455(1$st Cir$\mathrm{.}1950).$

$($i$)$What results to Mortgagor under the facts of $($h$),$ above, if the land declines in value from $$300,000$ to $$170,000$ at the time of the quitclaim deed?

$2.$Investor purchased three acres of land, each acre worth $$100,000$ for $$300,000.$ Investor sold one of the acres in year one for $$140,000$ and a second in year two for $$160,000.$ The total amount realized by Investor was $$300,000$ which is not in excess of her total purchase price. Does Investor have any gain or loss on the sales?