In 2017, Grace Loaned Her Friend Paula $12,000 to Invest

question 1419

Multiple Choice

In 2017, 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 2018, 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 2018.
• B) Grace deducts a $3,000 nonbusiness bad debt as a short- term capital loss in 2018 and carries $9,000 over to subsequent years.
• C) Grace deducts a $12,000 nonbusiness bad debt as a short- term capital loss in 2018.
• D) Grace deducts a business bad debt of $3,000 in 2018 and carries $9,000 over to subsequent years.

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Definitions:

Recruitment Methods

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Job's Requirements

The specific skills, experience, and qualifications necessary to perform the duties of a particular job.

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An economy driven by information, innovation, and technology, where knowledge is a key commodity and factor of production.

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An advantage that exists when the firm is able to deliver the same value and benefits as competitors but at a lower cost (cost advantage), or when the firm is able to deliver unique value or benefits that exceed those of competing products (differentiation advantage).