In 2019,Grace Loaned Her Friend Paula $12,000 to Invest in Various

question 36

Multiple Choice

In 2019,Grace loaned her friend Paula $12,000 to invest in various stocks.Paula signed a note to repay the principal with interest.Unfortunately the market for that industry sector plunged,and Paula incurred large losses.In 2019,Paula declared personal bankruptcy and Grace was unable to collect any of her loan.Grace had no other gains or losses last year or this year.The result is

• A)Grace deducts a business bad debt of $12,000 in 2019.
• B)Grace deducts a $12,000 nonbusiness bad debt as a short-term capital loss in 2019.
• C)Grace deducts a $3,000 nonbusiness bad debt as a short-term capital loss in 2019 and carries $9,000 over to subsequent years.
• D)Grace deducts a business bad debt of $3,000 in 2019 and carries $9,000 over to subsequent years.

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Definitions:

Homeostasis

The ability of an organism to maintain stable internal conditions despite changes in external environments.

Overheated

A state or condition where an object, device, or system exceeds its optimal temperature, potentially causing damage or failure.

Perspire

The process by which sweat glands in the skin produce sweat, allowing the body to regulate its temperature.

Classification Category

A level or rank in a systematic organization used to group entities with common characteristics, such as in biological taxonomy.