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:

African Slave Labor

The forced labor of African people, transported mainly to the Americas, used predominantly in plantation, mining, and domestic work from the 16th to the 19th centuries.

Labor Shortages

Situations where there are insufficient workers to fill the employment needs in certain industries, often leading to increased wages and recruitment efforts.

New Mexico

is a state located in the southwestern region of the United States, known for its diverse culture and history, as well as its unique landscapes and national monuments.

North America

A continent in the northern hemisphere, bounded by the Arctic Ocean, Atlantic Ocean, and the Pacific Ocean, including countries like Canada, the United States, and Mexico.