In 2015 Bonnie,a Sole Proprietor,loaned Her Employee,John,$10,000 to Help Him

question 9

Multiple Choice

In 2015 Bonnie,a sole proprietor,loaned her employee,John,$10,000 to help him buy a car.In 2017,before he repaid the $10,000,Bonnie told John that she was "tearing up" the $10,000 note in recognition of his strong job performance.How should John treat the amount forgiven?

• A)taxable income in year of loan
• B)taxable income in year of forgiveness
• C)excludible gift in year of loan
• D)excludible gift in year of forgiveness

---

Definitions:

Neural Tube

The precursor in the embryonic stage to the central nervous system, which includes the brain and spinal cord.

Brain

An organ of the central nervous system in vertebrates that coordinates sensory information and directs motor responses; center of thought and emotion.

Spinal Cord

The part of the central nervous system that extends from below the waist to the base of the brain.

Testosterone

A steroid hormone primarily found in males, responsible for the development of male secondary sexual characteristics and various other physiological functions.