QUESTION 4 Shifty borrowed $10,000 from Easy. When Easy tried to collect the debt, she discovered that Shifty had moved to another state. Easy tracked Shifty down and demanded payment. Knowing it would cost Easy a substantial amount of time and money to collect the debt, Shifty offered to pay $5,000 on the condition that Easy cancel the remainder of the debt. Easy agreed to accept the $5,000 and cancel the remaining $5,000 of the debt. Which of the following statements is correct? Shifty had $10,000 of income upon obtaining the loan. Easy has $5,000 of income when Shifty pays half the debt. Neither Shifty or Easy has any taxable income from this transaction. Shifty has $5,000 of income when Easy cancels the debt