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

question 1112

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) long- term capital loss.
• B) itemized deduction.
• C) short- term capital loss.
• D) ordinary loss.

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Definitions:

Inherited Condition

A health condition or trait that is passed from parents to their offspring through genes.

Maternal Determinants

Substances, such as proteins or RNAs, located in the egg cytoplasm, provided by the mother, that influence the early development of the embryo.

Mitosis

A process of cell division in eukaryotic cells that results in two genetically identical daughter cells from a single parent cell.

Cytoplasmic Segregation

Process that parcels out the maternal determinants, which play a role in development, during mitosis.