20. Linda loaned a friend $9,000 as financing for a new business venture. In the
ID: 2510808 • Letter: 2
Question
20. Linda loaned a friend $9,000 as financing for a new business venture. In the current year, Linda's friend declare bankruptcy and the debt is considered totally for the current year as a result of the worthless debt assuming he has no other capital gains or losses for the year? a. $9,000 ordinary loss b. $9,000 short term capital loss c. $3,000 short term capital loss d. $3,000 ordinary loss. e. $6,000 short term capital loss Part Two-Problems-Answer the following problems show your computation and circle the correct letter. . If computations are needed, Roger (age 39) and Lucy (age 37) are married taxpayers who file a joint income tax return for 2017. They have gross income of $75,400. Their deductions for adjusted gross income are $550 and they have itemized deduction of $5,300. If Roger and Lucy claim two personal exemptions and no dependency exemptions for 2017, calculate the following amounts. Their adjusted gross income 1. a. The amount of their standard deduction or itemized deductions Their taxable income b. c.Explanation / Answer
Answer 20).
c. $3000 Short-term Capital Loss
Two categories of Bad Debts, Business Bad Debts and Non-Business Bad Debts.
Business Bad Debts :- Debts that arise from the taxpayer's trade or business.
Non-Business Bad Debts :- Debts arise other than taxpayer's trade or business.
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