Last Year,Abby Loaned Her Friend,Pat,$10,000

question 46

Multiple Choice

Last year,Abby loaned her friend,Pat,$10,000.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.

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Definitions:

Delivery Of Products

The process of transporting goods from a seller to the purchaser’s location or making them available for collection.

Intermediaries

Entities that act as middlemen in the distribution chain between producers and consumers or between different businesses.

Air Transportation

The conveyance of people or goods from one place to another using aircraft.

Antique Porcelain

A category of collectible or valuable ceramics made in earlier periods, often prized for their craftsmanship, history, and aesthetic qualities.