equipment given to landlord for back rent

[fredazcpa]

client shuts down business mid year, gave equipment to landlord in exchange for canceling the lease and back rent for 14 months about 38K. The question is this a "sale" of the equipment, which then also be "rental Expense" (client also filing a final 1120S), if this is a sale then there is possible sec 179 recapture. They (shareholders) will be filing for BK when the taxes are done and any (if) refunds are in hand

and yes I am getting paid before anything walks out the door

thanks

[kcjenkins]

Yes, it's a sale and should be shown on a 4797.