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 reduced,
(B)#
such reduction does not occur—
(i) in a title 11 case, or
(ii) when the purchaser is insolvent, and
(B)(i)#
in a title 11 case, or
(B)(ii)#
when the purchaser is insolvent, and
(C)#
but for this paragraph, such reduction would be treated as income to the purchaser from the discharge of indebtedness,
then such reduction shall be treated as a purchase price adjustment.