Susan leases office space from Realty Corporation. Susan is a seamstress and uses the office to meet

Susan leases office space from Realty Corporation. Susan is a seamstress and uses the office to meet with clients and sew. She has no employees. Susan pays to the Realty Corporation monthly lease payments of $3,000. Recently, Susan had to stop working for an extended period of time due to a back injury sustained while skiing. As a result, she was unable to pay the $3,000 lease payments for the past two months. Susan has returned to work but knows it will take several months to begin bringing in the revenue she did before her injury. Realty Corporation has decided to “forget” the $6,000 Susan owes. She has been a good tenant for many years and brings client traffic that benefits the other tenants. What is the tax impact to Susan of Realty’s decision?

 

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