Five years ago Captain Jack borrowed (fully recourse) $100,000 from the Fourth National Bank. He used the loan proceeds to purchase a boat to ferry passengers across the Mississippi River. The loan requires payments of interest only for the first six years with a balloon payment due at the end of the sixth year. Captain Jack has paid the interest when due. The ferryboat business has not been doing well. Captain Jack's assets are limited to his personal residence, in which he has $30,000 of equity, $20,000 of cash, miscellaneous personal property including a car worth $10,000 and the ferryboat which is now worth $60,000 but in which Captain Jack has an adjusted basis of $10,000 (due to depreciation deductions). The Fourth National Bank agrees to accept the boat plus $15,000 of cash as repayment of the loan in full. Does Captain Jack recognize gross income from this arrangement?Assume that Captain Jack's only liability (other than the mortgage on his house) is the one to Fourth National Bank.