of a student loan may not be excluded from gross income if the discharge comes from which of the following? 1.1.20. The forgiveness A. A federal government agency B. A tax-exempt organization. C. An educational organization under a government-sponsored program. D. A private lending institution. 1.1.21. Sally, a calendar-year, cash-basis taxpayer operates a used furniture business in a building she owns. At the end of the current year, her basis in the building is $175,000, and the difference between the building's $100,000 value and the $150,000 mortgage reflects countrywide declining real property values. Because Sally's ability to make full payments on the mortgage that was taken out 2 years ago has decreased with demand for her inventory, the lender reduced the principal amount of the mortgage to $120,000 at year end. Which of the following statements is most accurate regarding the mortgage principal adjustment? A. The $30,000 adjustment is not includible in B. Sally must report $30,000 of gross income on C. Sally must reduce the property's basis on the D. Sally must either report $30,000 of gross gross income for the current year. her current-year tax return. first day of her next tax year. income for the current year or reduce the property's basis next year