Connor Owes $4 Million and Has Assets of Only $1

Multiple Choice

Connor owes $4 million and has assets of only $1 million.He declares and files personal and business bankruptcy and his creditors approve a payment plan of $.25 per dollar.Connor has a net operating loss carryover of $2 million.The remaining 75 percent of his debt will be canceled.Connor must recognize income of

A) $0.
B) $1 million.
C) $2 million.
D) $3 million.