Three Years Ago, Sharon Loaned Her Sister $30,000 to Buy

question 44

Multiple Choice

Three years ago, Sharon loaned her sister $30,000 to buy a car. A note was issued for the loan with the provision for monthly payments of principal and interest. Last year, Sharon purchased a car from the same dealer, Hank's Auto. As partial payment for the car, the dealer accepted the note from Sharon's sister. At the time Sharon purchased the car, the note had a balance of $18,000. During the current year, Sharon's sister died. Hank's Auto was notified that no further payments on the note would be received. At the time of the notification, the note had a balance due of $15,500. What is the amount of loss, with respect to the note, that Hank's Auto may claim on the current year tax return?

• A) $0
• B) $3,000
• C) $15,500
• D) $18,000
• E) None of the above

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Definitions:

Stoically

With endurance and without complaint, embodying the qualities of stoicism, a philosophy promoting resilience and self-control.

Archetype

A universally recognized model or pattern of behaviors that is found in myths and stories across different cultures.

Stereotype

A fixed, over-generalized belief about a particular group or class of people.

Chauvinism

An attitude of superiority towards members of the opposite sex or belief in the superiority of one's own group or people.