Installment sale - cancellation or price reduction?

Technical topics regarding tax preparation.
#1
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2
Joined:
10-Mar-2019 12:25pm
Location:
Georgia
Client sold business in 2007 for 500k: assets, consulting agreement, non-compete + goodwill = 500k.

Receives monthly payments allocated among the above in proportion to sales price of each.

In 2019, client (didn't work with this client in 2019) supposedly "cancelled" 200k of the sales price or buyer's debt. Client states, "cancelled." However, clearly, she didn't work through this with her former accountant. No action was taken on this.

I argue that she didn't cancel the installment obligation (or 200k), because she's still receiving monthly installment payments. Sounds more like she simply reduced the selling price, which isn't considered a disposition of the installment obligation.

Any pointers here or something I should be thinking more about? Many thanks!
 

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