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Liberty Mirror we did not consider the character of the
nonexistent income. Danenberg v. Commissioner, 73 T.C. at 383.
Thus, we are satisfied that the discharge of the loans, the
transfer of the property, and the assignment of the sale proceeds
constitute a single integrated sale or exchange.
Alternatively, petitioner argues that Briarpark realized
$9,200,000 of COI income in 1987 when InterFirst and Briarpark
agreed to convert the outstanding balance of the original loan,
which exceeded the fair market value of the property, from
recourse to nonrecourse debt.
Whether a debt has been discharged is dependent upon the
substance of the transaction. Cozzi v. Commissioner, 88 T.C.
435, 445 (1987). A debt is considered to be discharged at the
point when it becomes clear that the debt will never have to be
paid. Id. In deciding when such a moment occurs, we must
consider the actions of the parties together with other facts and
circumstances relating to the likelihood of payment. Id. Any
identifiable event that fixes with certainty the amount to be
discharged may be taken into consideration. Id. (citing United
States v. S.S. White Dental Manufacturing Co., 274 U.S. 398
(1927)).
The existence of a faint possibility that a debt may be
collected does not prevent the recognition of COI income.
Exchange Sec. Bank v. United States, 492 F.2d 1096, 1099 (5th
Cir. 1974); cf. Fidelity-Philadelphia Trust Co. v. Commissioner,
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