Benny Loaned $100,000 to His Controlled Corporation

question 65

True/False

Benny loaned $100,000 to his controlled corporation. When it became apparent the corporation would not be able to repay the loan in the near future, Benny canceled the debt. The corporation should treat the cancellation as a nontaxable contribution to capital.

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Definitions:

Muscular Activity

Muscular activity refers to the movement or action generated by the contraction of muscles, which can range from voluntary movements to involuntary processes.

Animal's Ability

Refers to the innate or learned capacities of animals to perform actions or solve problems relevant to their survival and reproduction.

Hydra

A genus of small, fresh-water organisms from the phylum Cnidaria, known for their regenerative ability.

Nerve Net

The network of neurons found in cnidarians and ctenophores.