Yanni owns a factory and purchases some heavy equipment from ABC, Inc. Yanni signs a note with ABC, Inc. in the amount of $1 million, which is payable in equal installments over the next 5 years. One year after the purchase, ABC, Inc. goes out of business, and XYZ Bank purchases the note. A year after that, the equipment begins to fail, several years before it should be having any problems. Yanni contacts XYZ Bank and demands a price reduction, or it will refuse to keep paying. XYZ Bank agrees to a $200,000 price reduction. 

Explain what tax consequences, if any, should occur. Comprehensively analyze this scenario, supporting your conclusion with law and facts.