The Presumption That an Agreement Made in a Social or Domestic

question 14

Multiple Choice

The presumption that an agreement made in a social or domestic context was not intended to be legally enforceable can be rebutted by:

• A)severing the friendship with the other party to the agreement
• B)issuing legal proceedings against the other party to the agreement
• C)proving that the other party to the agreement is unreliable and not trustworthy.
• D)proving to the court that the parties intended it to be a legally enforceable agreement.

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Definitions:

Listed Property

Assets specified by the IRS that are subject to specific record-keeping and substantiation requirements, such as vehicles and computers used for business.

Business Bad Debt

Debt associated with the conduct of a trade or business that becomes worthless or uncollectible during the tax year.

Short-Term Capital Loss

A loss realized on the sale or exchange of a capital asset held for one year or less.

Completely Worthless

A term generally used to describe an asset that has lost all of its market value or has no foreseeable use or value.