From a non-CPA If it is a earn-out, it is not a Note. No interest. Seller gets paid when earned and pays taxes. Buyer recognizes GW when paid and amortizes it was an Asset purchase. No amortization if Stock purchase. If it is a Forgivable Note, seller includes in Price on day one, but pays taxes only when payment received. Buyer also includes in Price which most likely increases GW. When payment is made it is same as earn-out Note. If Note is forgiven, buyer recognizes as forgiveness income, but also reduces GW, thus resulting in no tax impact. If FN has interest, you pay that and expense it when paid. However, FN is not required to have interest. (Note: There are complications to seller if cash paid is less than FMV of assets received.) Hope above helps when you talk to tax advisor.

This question comes up every six months or so here and every time there is misinformation and the answers are all over the place. Forgiven debt incurred in connection with a purchase is NOT cancellation of debt income and is treated as a purchase price adjustment under Section 108(e)(5) of the Code (unless the forgiveness occurs in bankruptcy or when business is insolvent).