I started by cash basis restaurant business in April of 2019 (LLC). At the time, I signed a 3-year lease with a personal recourse clause. When COVID hit in March of 2020, I had to go out of business. In exchange for forgiving the rent that remained on the lease, we agreed to exchange our business assets. The landlord kept our restaurant assets (tables, stove and other equipment) and let us out of the 3-year lease. How should this be reported in Turbo Tax? I presume this is not considered ordinary income since since it was recourse debt that was forgiven and what have otherwise been allowed as a business deduction? However, I am not sure how to account for this and treat it from a tax perspective within Turbo Tax. Can you help?
