Which of the Following Taxpayers Can Claim a Business Bad

question 11

Multiple Choice

Which of the following taxpayers can claim a business bad debt deduction for the current year?
I.Sylvia lent her neighbor $4,000 to put a new roof on his home. Because they have been friends for over 15 years, Sylvia trusted her neighbor to pay her back and didn't make him sign a note with interest. The neighbor has left town and Sylvia will not get any of her money back. Her loss is properly related to this year using the cash basis of accounting.
II.Saul is an attorney using the cash basis of accounting. One of his clients is short of money to pay the utilities in the office building Saul rents from him. Saul advances the client $5,000. Saul has just learned that the client has filed bankruptcy and that Saul will not be repaid for any part of the loan.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Self-Esteem

An individual's subjective evaluation of their own worth or the positive or negative view one holds about oneself.

Personality

A person’s typical thoughts, emotional responses, and behaviors that are relatively stable over time and across circumstances.

Characteristics

Traits or qualities that define an entity, making it identifiable or distinguishing it from others.

Self-Esteem

An individual's subjective evaluation of their own worth, encompassing beliefs and emotions such as pride and shame.