Tracey purchases an office building as an investment in November of Year 1. She pays $1,000,000 cash and obtains a mortgage for $4,000,000 (non-recourse). In the same year she retrofits the building at a cost of $1,000,000. She incurs legal and brokerage fees of $200,000 and pays $20,000 in title insurance. In Year 3, after the building's value has appreciated, Tracey takes a second mortgage on the building for $1,500,000 (non-recourse) from the same lender. By Year 10, she has paid off 60% of the first mortgage and 20% of the second mortgage. In January of Year 10 Tracey sells the building in exchange for $6,000,000 cash and the buyer's assumption of the debt and she incurs legal and brokerage fees of $500,000. Question A (3 points) What is Tracey's Basis in the building at the beginning of Year 2? Question B (3 points) What is Tracey's Gain/Loss on the sale of the building in Year 10? Question C (2 points) Assume that instead of selling the building in Year 10, her lender forecloses on the building. In this case, what is the Amount Realized and what is Tracey's Gain/Loss