John owes Mark $50,000. For business reasons, Mark tells John that he will consider the debt fully paid if John pays him $10,000 in cash. John pays the $10,000, and then true to his word, Mark officially notifies John that the remaining $40,000 of the loan is relieved. Under IRC Section 6l, you see that the $40,000 of debt relieved is generally taxable income to John. Answer the following questions after considering the following additional information you gather. John's balance sheet shows the following immediately before Mark forgave the debt and after paying the $10,000: Cash = $20,000 Depreciable Property: FMV= $250,000; Basis = $100,000 Total debt (before relief) = $300,000

No need to calculate the amounts since this is a tax research question.

a. How much does John have to recognize in gross income in the year of the debt relief?

b. If John has no other "tax attributes," what impact does the relief of debt have on the basis of John's depreciable assets?

c. What would be the impact if John has a net operating loss carryover from a prior year of $70,000?