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In return for $2,000, Mr. Huan cancels Mr. Chow's debt of $5,000. The cancellation is not a gift and Mr. Chow is neither insolvent nor

In return for $2,000, Mr. Huan cancels Mr. Chow's debt of $5,000. The cancellation is not a gift and Mr. Chow is neither insolvent nor bankrupt. What would be Mr. Huan's taxable income and what would be Mr. Chow's taxable income based upon the facts in the scenario? Tax Rule/Explanation?

10.1.1

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In return for $2,000, Mr. Huan cancels Mr. Chow's debt of $5,000. The cancellation is not a gift and Mr. Chow is neither insolvent nor

In return for $2,000, Mr. Huan cancels Mr. Chow's debt of $5,000. The cancellation is not a gift and Mr. Chow is neither insolvent nor bankrupt. What would be Mr. Huan's taxable income and what would be Mr. Chow's taxable income based upon the facts in the scenario? Tax Rule/Explanation? 10.1.1

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In return for $2,000, Mr. Huan cancels Mr. Chow's debt of $5,000. The cancellation is not a gift and Mr. Chow is neither insolvent nor bankrupt. What would be Mr. Huan's taxable income and what would be Mr. Chow's taxable income based upon the facts in the scenario? Tax Rule/Explanation?

10.1.1