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respondent’s determination that the December 2, 1999 transaction
constitutes a sale of lot 5 by petitioners for $318,000, peti-
tioners maintain an alternative position under section 108(e)(5)
with respect to that transaction. According to petitioners, the
$54,400 check dated June 3, 2003, that petitioners issued to
Kevin O’Malley qualifies petitioners for a purchase price reduc-
tion (purchase price reduction) under section 108(e)(5) with
respect to the December 2, 1999 transaction. In support of that
position, petitioners argue that the legislative history of
section 108(e)(5) indicates that Congress did not intend for
section 108(e)(5) to apply only when the debt of a purchaser to
the seller of property is reduced.
Section 108(e)(5) provides:
SEC. 108. INCOME FROM DISCHARGE OF INDEBTEDNESS.
* * * * * * *
(e) General Rules for Discharge of Indebted-
ness (Including Discharges Not in Title 11 Cases
or Insolvency).--For purposes of this title--
* * * * * * *
(5) Purchase-money debt reduction for solvent
debtor treated as price reduction.--If--
(A) the debt of a purchaser of property
to the seller of such property which arose
out of the purchase of such property is re-
duced,
(B) such reduction does not occur--
(i) in a title 11 case, or
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