- Joined
- Dec 22, 2015
- Messages
- 5
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I was a part owner of a company -- an SCorp -- and I sold my share and left. (The SCorp bought my share, I guess you could call it a buy back.). The company agreed to pay me for my share over time with the restriction that I not engage in any competing business. The amount they owed me was a debt on their balance sheet.
I decided that I wanted to engage in a competing business so I signed an agreement with the company reducing the amount they owed me. As a result, the debt on their books was reduced. My question is, is the reduction of their debt to me considered taxable income for them?
I decided that I wanted to engage in a competing business so I signed an agreement with the company reducing the amount they owed me. As a result, the debt on their books was reduced. My question is, is the reduction of their debt to me considered taxable income for them?