Three Years Ago Edna Loaned Carol $80,000 to Help Her

question 21

Multiple Choice

Three years ago Edna loaned Carol $80,000 to help her get started in the TV repair business. Carol gave Edna a 5-year, 9% note with semiannual repayment terms. Edna and Carol have been friends for over 35 years. Edna is a recently retired college professor with a significant portfolio of investments. During the current year, Carol became ill and couldn't continue operating the business. She has repaid $10,000 of the debt owed Edna. Because Carol has no remaining assets, no additional payments will be made to any of her creditors. For the current year, Edna realizes a

• A)$- 0 -
• B)$70,000 ordinary loss
• C)$70,000 long-term capital loss
• D)$70,000 short-term capital loss
• E)$80,000 ordinary loss

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Definitions:

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