ABC Corp is struggling financially. Prior to any debt renegotiations, they have assets valued at about $13 million and liabilities in the amount of $15 million. As a result of their financial struggles, they negotiate with one of their vendors to reduce an outstanding liability. ABC Corp is able to secure a $1 million reduction on an outstanding debt. Is there gross income?

What if the debt reduction is $3 million?

Answer rating: 100% (QA)

To determine if there is gross income resulting from the debt reduction we need to compare the reduc... View the full answer