I sold my three-unit residential rental property in California in 2020. As a condition of the sale, the buyer required me to provide him with a vacant unit for him to move into. In order to entice the tenant of the unit to move out, I offered her a substantial amount of cash to vacate. In California, this is permissible by law under a program known as Cash for Keys.
Now that the property has been sold, am I allowed to deduct the cash payment on my federal and state tax returns as an expense relating to the sale of business property?
