These individuals has realized income from reduction in debt

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Sally and Ed each own property with a fair market value less than the amount of the outstanding mortgage on the property and also less than the original cost basis. They each were able to convince the mortgage holder to reduce the principal amount on the mortgage. Sally's mortgage is on her personal residence and Ed's mortgage is on rental property he owns.

Explain whether each of these individuals has realized income from the reduction in the debt.

Reference no: EM13805759

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