In 2010, Tru Corporation Deducted $5,000 of Bad Debts

question 113

Essay

In 2010, Tru Corporation deducted $5,000 of bad debts. It received no tax benefit from the deduction because it had an NOL in 2010 that it was unable to carry back or forward. In 2011, Tru recovered $4,000 of the amount due.
a)What amount must Tru include in income in 2011?
b)What effect does the $4,000 have on E&P in 2011, if any?

---

Definitions:

Nonabusers

Individuals who do not engage in substance abuse or the mistreatment of others.

Family Abusers

Individuals who inflict physical, sexual, or psychological harm on family members, often maintaining power through fear and control.

Lower-Class

A social class often characterized by low socioeconomic status and limited access to resources.

Marital Rape

Non-consensual sex imposed by a spouse, legally recognized as a form of rape in many jurisdictions.