Taxpayer (S Corporation) reported gain as a result of sale of a partnership interest done as an installment sale because 400,000 was received in cash and 200,000 as a Note Receivable. Four years later the 200,000 was forgiven/cancelled and the 400,000 was paid back to the buyer by the seller. What is the tax implication of the forgiveness and the payback?
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Since you have more detail information, maybe the following references provide some insight:
See The Tax Book - Tab 8-18. Covers in-depth Installment Sales - Buyer & Seller responsibilities.
Also an article on “Transfers of installment obligations....”
https://www.journalofaccountancy.com...gain-loss.html
Always cite your source for support to defend your opinion -
Many posts regarding Installment Sales - noticed from a search on this website that may also help.
also, see If page 12 - Disposition of an Installment Obligation - IRS pub 537Applies to your scenario
Last edited by TAXNJ; 07-15-2020, 11:41 AM.Always cite your source for support to defend your opinionComment
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