In 2014 Betty Loaned Her Son,Juan,$10,000 to Help Him Buy

question 33

Multiple Choice

In 2014 Betty loaned her son,Juan,$10,000 to help him buy a car.In 2015,before he repaid the $10,000,Betty told Juan that she was "tearing up" the $10,000 note as a graduation present.How should Juan treat the amount forgiven?

• A)taxable income in year of loan
• B)taxable income in year of forgiveness
• C)excludable gift in year of loan
• D)excludable gift in year of forgiveness

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