Which taxpayer is most likely to have taxable income from cancellation of debt, assuming no exclusions apply? Valarie. She defaulted on a nonrecourse loan. At the time of foreclosure, the outstanding debt was $165,000 and fair market value of the property was $170,000. Alexander. He defaulted on a nonrecourse loan. At the time of foreclosure, the outstanding debt was $279,000 and fair market value of the property was $258,000. Claude. He defaulted on a recourse loan. At the time of foreclosure, the outstanding debt was $85,000 and the fair market value of the property was $75,000. Eliza. She defaulted on a recourse loan. At the time of foreclosure, the outstanding debt was $105,000 and fair market