Discussion:Foreclosure & Resale

My client sold his business (building, land, goodwill, equip) on the installment basis to an S corp in 2005. The sole stockholder of that S corp is now filing personal bankruptcy as well as bankruptcy for 3 S corps that he owns, so my client will be getting back the business (building, land, goodwill, equip). Once the buyer's bankruptcy is completed, my client intends to resell the buiness back to the buyer for approx the outstanding balance on the original note because the buyer will then be free of numerous other debts and should be able to run this one business just fine. My client has checked with his attorney and has been told this is legal, so I'm not going to question that. I'm just looking for any tax ramifications to this scenario. Of course my client will have to report any gain from the repossession on this tax return in the year he gets the business back. Can you think of any other tax ramifications?