Connor Owes $4 Million and Has Assets of Only $1

question 66

Multiple Choice

Connor owes $4 million and has assets of only $1 million.He declares and files personal and business bankruptcy and his creditors approve a payment plan of $.25 per dollar.Connor has a net operating loss carryover of $2 million.The remaining 75 percent of his debt will be canceled.Connor must recognize income of

• A)$0.
• B)$1 million.
• C)$2 million.
• D)$3 million.

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Definitions:

Minimum Wage

Legislation requiring that workers be paid at least the stated minimum hourly rate of pay.

Tax Rates

The percentage at which an individual or corporation is taxed on their income or profits.

Economic Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in GDP, real income, employment, industrial production, and wholesale-retail sales.

Keynesian View

An economic theory proposing that government intervention, through monetary and fiscal policy, can mitigate the adverse effects of recessions and depressions.