Benny Loaned $100,000 to His Controlled Corporation

question 65

True/False

Benny loaned $100,000 to his controlled corporation. When it became apparent the corporation would not be able to repay the loan in the near future, Benny canceled the debt. The corporation should treat the cancellation as a nontaxable contribution to capital.

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Definitions:

Sales Presentation

A speech or demonstration by a salesperson to introduce a product or service to potential customers, aiming to generate interest and close a sale.

Preapproach Stage

The stage of the sales process where initial research is conducted and strategies are devised before making direct contact with potential customers.

B2B Customer

Stands for "Business to Business" customer, which describes transactions or engagements between businesses rather than between businesses and individual consumers.

Major Customer

A key client who significantly contributes to a company's revenue, often characterized by large, recurring purchases.