You are right of course. I don't know why this has thrown my reasoning skills. Here is the actual case and if someone would help me I will appreciate it. Equipment bought Jan 2020. Paid 67000 total. Paid 7000 down and financed 60000, Returned it in August. Recourse loan.  Lender has resold and now the balance due is $15000. Do I show this as a sale on 4797?   And then if there is a 1099C next year that is handled then.