An S-corp sold its assets to a buyer, who financed the transaction through the SBA. The seller also took back a loan which is subordinate to the SBA loan. The Seller now, two years after the sale, wants to forgive this loan to the buyer. If I understand it correctly, if it is considered a gift to the buyer, a 1099-C is not required to be filed and it will incur little to no tax liability for either party, is that correct?
