George (An 80% Shareholder) Has Made Loans to Mountainview Corporation

question 41

Multiple Choice

George (an 80% shareholder) has made loans to Mountainview Corporation that become worthless in the current year. George is not employed by Mountainview.

• A) George is not permitted a deduction for the worthless loans.
• B) The loans provide a nonbusiness bad debt deduction to George in the current year.
• C) The loans provide George with a business bad debt deduction.
• D) George may claim an ordinary loss as to the worthless loans.
• E) None of the above.

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Definitions:

Social Inequalities

Disparities in wealth, status, or power among individuals or groups within a society.

Ingroup Bias

The tendency to favor and prioritize the members of one's own group over those of another.

Outgroup Homogeneity

The tendency to view members of an outgroup as more similar to one another than members of one's own group (ingroup).

Wealthy People

Individuals possessing a significant amount of capital, assets, or resources, well above the financial average of the general population.