T purchased a building for $500 (000 omitted throughout). T paid $100 cash down and gave a non-recourse note (secured by a mortgage on the property)...

2. T purchased a building for $500 (000 omitted throughout). T paid $100 cash down and gave a non-recourse note (secured by a mortgage on the property) for the $400 balance. T held the property as an investment. In answering the following question, ignore the land, as if only the building were purchased and sold.

                  (a) What is T’s basis for depreciation?

(b) Over the next several years, T properly deducts $300 of depreciation, pays $100 on the mortgage principal, and makes all required interest payments. T then sells the building to P, who takes the property subject to the remaining $300 mortgage and pays T $250 cash. What is the amount of T’s realized gain or loss?

(c) Suppose instead that after T had properly deducted the $300 of depreciation and reduced the mortgage principal to $300, the building declined in value to $275, at which point T surrendered the property to the mortgagee. What result to T?

(d) Same as (c), except that the building was worth only $150 when it was surrendered to the mortgagee.

(e) How would your answers in (c) differ if T had been personally liable on the indebtedness, but the mortgagee had accepted the property in full satisfaction of the indebtedness? Assume here that T is insolvent immediately after the debt discharge.

(f) How would your answers to (d) differ if T had been personally liable on the indebtedness, but the mortgagee had accepted the property in full satisfaction of the indebtedness? Assume here the T is insolvent immediately after the debt discharge.

Answers are in bold T purchased a building for $500 (000 omitted throughout). T paid $100 cash down and gave anon-recourse note (secured by a mortgage on the property) for the $400 balance. T held...