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Multiple Choice 2-39 Forgiveness of Debt Income (LO 2.18) Kate acquires a principal residence in 2016 for $200,000 secured by a $180,000 mortgage. In 2020,

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Multiple Choice 2-39 Forgiveness of Debt Income (LO 2.18) Kate acquires a principal residence in 2016 for $200,000 secured by a $180,000 mortgage. In 2020, Kate catches the coronavirus and misses work for 3 months. Her employer stops paying her after 10 days. In 2020 when the mortgage balance is $170,000, Kate and the bank revise her terms and lower the loan balance to $150,000. The market value of the home remains above $200,000. How much cancellation of debt income will Kate recognize? a. $20,000. b. $10,000. c. $150,000. d. $170,000. e. $0

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