Last Year,Abby Loaned Pat $10,000 as a Gesture of Their

question 104

Multiple Choice

Last year,Abby loaned Pat $10,000 as a gesture of their friendship.Although Pat had signed a note payable that contained interest payments and a maturity date,the loan had not been repaid this year when Pat died insolvent.For this year,assuming that the loan was bona fide,Abby should account for nonpayment of the loan as a(n)

• A)itemized deduction.
• B)ordinary loss.
• C)long-term capital loss.
• D)short-term capital loss.

---

Definitions:

Stable Internal

A belief that the cause of an event is due to stable, enduring factors within an individual.

Availability Heuristic

The tendency to assume that information that comes easily to mind (or is readily available) is more frequent or common.

Locus Of Causality

The position or place within an individual that determines where the cause of behavior is perceived to originate, whether internally (within oneself) or externally (outside factors).

Internal

Pertaining to or situated within something; intrinsic.