Tyler borrowed $15,000 to purchase a machine. He later borrowed $3,000 using the machine as collateral. Both notes are nonrecourse. Ten years later, the machine has an adjusted basis of zero and two outstanding note balances of $5,500 and $900. Tyler sells the machine subject to the two liabilities for $1,200. What is his realized gain or loss? a. $0. b. $1,200. c. $6,400. d. $7,600. e. None of the above