This can be deemed as Class VII - "Goodwill", I'm good with that and so are they. The father's income is taken care of with the 8594 and 4797. The son also completes the 8594, but where does he recoup the expense of buying the business? He is paying the father $2000 a month of which $400 is interest. The 4797 is for income, not expense. Also, does the son need to give the father anything other than a 1099-INT?

Thanks again!