Tax Case Terry owns real estate with an adjusted basis of $600,000 and a fair market value of $1.1 million. The amount of the mortgage on the property is $2.5 million. Because of substantial losses, Terry deeds/transfers the property back to the mortgage holder.

a) How much of a gain or loss does Terry recognize?

b) Suppose Terry is in bankruptcy, is your answer the same?

c) Suppose this is Terrys personal residence for the last 7 years, is your answer the same as in a)?