A Corporation Which Makes a Loan to a Shareholder Can

question 28

True/False

A corporation which makes a loan to a shareholder can have a nonbusiness bad debt deduction.

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Definitions:

Debt Free Period

A timeframe during which an individual or organization has fully paid off all outstanding debts, owing no money to creditors.

Warehouse Receipts

Documents that provide proof of ownership of commodities (like grain, metals, etc.) stored in a warehouse.

Trust Receipts

Trust receipts are documents that evidence the release of merchandise to a buyer in trust for the bank until the loan amount is paid.

Pledged Inventory

Inventory that has been used as collateral for a loan.