George (An 80% Shareholder) Has Made Loans to Mountainview Corporation

question 41

Multiple Choice

George (an 80% shareholder) has made loans to Mountainview Corporation that become worthless in the current year. George is not employed by Mountainview.

• A) George is not permitted a deduction for the worthless loans.
• B) The loans provide a nonbusiness bad debt deduction to George in the current year.
• C) The loans provide George with a business bad debt deduction.
• D) George may claim an ordinary loss as to the worthless loans.
• E) None of the above.

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Definitions:

Collectivistic Society

A society that prioritizes the group over individual ambitions, valuing interdependence, cooperation, and social harmony.

Individualistic Collectivism

A social pattern that combines aspects of individualism and collectivism; valuing both personal independence and group cohesion.

Living Independently

The ability of an individual to manage their own affairs and daily needs without reliance on others.

Career Path

The progression or sequence of occupations undertaken by an individual throughout their working life.