Martha,an Accrual-Method Taxpayer,has an Accounting Practice

question 60

Multiple Choice

Martha,an accrual-method taxpayer,has an accounting practice.In 2013,she performs tax analyses for Arnold and sends him an invoice for $10,000.In 2014,Martha sells her practice and all accounts to David.Arnold's debt becomes worthless that year after David has purchased the practice.The result is

• A)Martha deducts a nonbusiness bad debt in 2014.
• B)Martha deducts a business bad debt in 2014.
• C)David deducts a business bad debt in 2014.
• D)David deducts a nonbusiness bad debt in 2014.

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Definitions:

Coefficient Of Determination

A statistical measure, often denoted as R², indicating the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

Variation

The variability or spread in a set of data, measurements, or quantities showing how much they differ from each other.

Response Surface

A visual representation of the relationship between one or more independent variables and the response they cause, often used in optimizations.

Sum Of Squares

A statistical technique used to measure the variability within a dataset, calculated by summing the squared differences from the mean.