Question 17 of 30. When a taxpayer files bankruptcy or is insolvent, the basis of property subject to reduction is limited to: The basis of property, other than money, held by the buyer at the beginning of the year following the year of cancellation of debt An amount equal to the total net basis of property held by the buyer immediately after the cancellation of debt. The greater of (1) and (2). The lesser of (1) and (2) Mark for follow up