my first test says #2 is wrong and I believe #3 is too. I have looked at other answers that say the same wrong answer.

A taxpayer who lost property to foreclosure during the year brings a Form 1099-A to their tax appointment. Box 5 of the form is checked, indicating that the taxpayer was personally responsible for repaying the debt. This informs the tax preparer that the taxpayer: Cannot have taxable income associated with this event. Cannot have ordinary inoeme from this event, but may have-capital gain. Does not need to report the information on their tax return unless they also received a Form 1099C. May have taxable income associated with this event