Jed Is an Electrician

question 4

Multiple Choice

Jed is an electrician. Jed and his wife are accrual basis taxpayers and file a joint return. Jed wired a new house for Alison and billed her $15,000. Alison paid Jed $10,000 and refused to pay the remainder of the bill, claiming the fee to be exorbitant. Jed took Alison to Small Claims Court for the unpaid amount and was awarded a $2,000 judgement. Jed was able to collect the judgement but not the remainder of the bill from Alison. What amount of loss may Jed deduct in the current year?

• A) $0
• B) $2,000
• C) $3,000
• D) $5,000
• E) None of the above

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Definitions:

Kohlberg

A psychologist best known for his theory of stages of moral development.

Self-Defeating Decision

Choices or actions that thwart the individual's own goals or interests, often due to underlying psychological issues.

Group Harm

Refers to negative impacts or damage inflicted upon a group of individuals, which can result from actions, policies, or societal structures.

Cooperation and Competition

Social processes; cooperation involves working together towards a common goal, while competition involves rivalry between individuals or groups for resources or achievements.