Optimistic borrowed $$20,000$ 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 $$10,000$ 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$.$ The debt is a qualified business indebtedness and the basis of the machine must be reduced.

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

D$.$ Optimistic has $$10,000$ of income.