Did he forgive the loan or did he gift the loan to his son?

Apparently it states in his dad's will that he forgives the promissory note between him and the Scorp which his son owns.

"Did he forgive the loan or did he gift the loan to his son?" Or are you trying to pay it off using inheritance? Because now you have Three possible options.

It sounds like he forgave the loan.

Was hoping he gifted it so that the Scorp could start making payments to the shareholder but the will states that "I have taken a promissory note for the balance of the sale price due me from the buyer. I forgive the balance due on this promissory note at the time of my death."

Thanks for your help!

@Avs19 

Whose tax return are you working on: The 1120S, the deceased, or "your friend's individual?"

Working on the Scorp (1120S) and shareholder/son (1040)

Substance over form?  Was it really the father's intent to have his son pay tax on loan forgiveness or was his real intent to just not have the son pay money back to the estate?

I'm sure the intent was to not pay taxes on the forgiveness but my worry is that it was between the Scorp and the father. Not sure how much of a difference that makes?

Thought about transferring the loan to the son and have Scorp continue to make payments to the son but not sure if that would fly with the IRS.

That's probably the best and easiest way to do it assuming the IRS doesn't try to say it was a loan between Scorp and lender rather than loan between father and son. But even if it is between Scorp and lender, inheritances are an exception to cancellation of debt.