$[2]$ Optimistic borrowed $\backslash (\backslash$$ $20,000\backslash )$ to buy a machine for his printing business. Shortly thereafter, the economy went into a deep recession, and Optimistic was not able to repay the debt, although he was not insolvent. In the current year, the creditor reduced the debt by $\backslash (\backslash$$ $10,000\backslash )$ so Optimistic could afford to pay it$.$ The creditor was not the seller of the machine. As a result of this reduction of debt,

A$.$ The purchase price of the machine is adjusted to reduce Optimistic's basis in the machine.

B$.$ Optimistic has $\backslash (\backslash$$ $10,000\backslash )$ of income.

C$.$ The debt is a qualified business indebtedness and the basis of the machine must be reduced.

D$.$ Any tax effect from the reduction of the debt is deferred until final payment by Optimistic.