Exercise 4-4 (LO. 8) Before any debt cancellation, PeppersCo holds business land with a $2,400,000 fair market value, a $1,000,000 tax basis, and a related mortgage of $3,000,000. In lieu of foreclosure, the lender reduces the mortgage principal by $1,300,000. What are the Federal income tax consequences of the debt cancellation? If an amount is zero, enter "O". and increases its basis in the land As a result, PeppersCo recognizes income of $ basis by $