Question

In: Accounting

Jack loaned his friend Nill $29,000 three years ago. Nill signed a note and made payments...

Jack loaned his friend Nill $29,000 three years ago. Nill signed a note and made payments on the loan. Last year, when the remaining balance was $26,100, Nill filed for bankruptcy and notified Jack that he would be unable to pay the balance on the loan. Jack treated the $26,100 as a nonbusiness bad debt. Last year, before considering the tax implications of the nonbusiness bad debt, Jack had capital gains of $10,440 and taxable income of $35,000. During the current year, Nill paid Jack $23,490 in satisfaction of the debt. Determine Jack's tax treatment for the $23,490 received in the current year. The nonbusiness bad debt of $26,100 would have been reported as a short-term capital loss, and $_________ would be included in Jack's gross income.

Solutions

Expert Solution

Hi

Let me know in case you face any issue:

If net of loss amount is adjusted considering the remaining $2610 will not be recovered then following will be the answer:

ekkarill92 answered 2 months ago
Next > < Previous

Related Solutions

Jack is single and he made his first taxable gift of $1,000,000 in 2008. Jack made...
Jack is single and he made his first taxable gift of $1,000,000 in 2008. Jack made additional gifts in 2009, at which time he gave $1,750,000 to each of his three children and an additional $1,000,000 to State University (a charity). The annual exclusion in 2009 was $13,000. Recently Jack has been in poor health and would like you to estimate his estate tax should he die this year. Jack estimates his taxable estate (after deductions) will be worth $5.4...
Jack is single and he made his first taxable gift of $1,000,000 in 2008. Jack made...
Jack is single and he made his first taxable gift of $1,000,000 in 2008. Jack made additional gifts in 2009, at which time he gave $1,750,000 to each of his three children and an additional $1,000,000 to State University (a charity). The annual exclusion in 2009 was $13,000. Recently Jack has been in poor health and would like you to estimate his estate tax should he die this year. Jack estimates his taxable estate (after deductions) will be worth $5.4...
Jack is single and he made his first taxable gift of $1,000,000 in 2008. Jack made...
Jack is single and he made his first taxable gift of $1,000,000 in 2008. Jack made additional gifts in 2009, at which time he gave $1,750,000 to each of his three children and an additional $1,000,000 to State University (a charity). The annual exclusion in 2009 was $13,000. Recently Jack has been in poor health and would like you to estimate his estate tax should he die this year. Jack estimates his taxable estate (after deductions) will be worth $10.4...
Ian loaned his friend $25,000 to start a new business. He considers this loan to be...
Ian loaned his friend $25,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 9% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year. Ian texted and asked that you help him calculate the annual payments that he should expect to receive so that he...
Jack，the owner of a company, loaned his corporation $150,000. However, this corporation declared bankruptcy. How should...
Jack，the owner of a company, loaned his corporation $150,000. However, this corporation declared bankruptcy. How should Jack treat the loan? Use Internal Revenue Code Sections to provide advices.
Nicky is the assistant to the HR manager. His best friend Jack is applying for a...
Nicky is the assistant to the HR manager. His best friend Jack is applying for a job with the company and Nicky agreed to be a reference for him. Jack asks for advice on preparing for the interview. Nicky has access to the interview questions that will be asked of all applicants. It would be great for his best friend to work at the same company. Nicky stops to think, what would be the consequences of his decision to share...
Question a. Jack and his partner, Sally, separated 5 years ago. The written separation agreement requires...
Question a. Jack and his partner, Sally, separated 5 years ago. The written separation agreement requires Jack to make payments for the maintenance of Sally and their child. Payments were set at $250 per month for Sally and $150 per month for their child. In the current year Jack’s payments totaled $4,000. How much of the current year payments can Jack deduct on his current year personal tax return? $2,200 $1,800 $3,000 $4,000 Question b. With respect to moving expenses,...
10.  Jack has a friend, Mike, who recently sold his car to another friend, Sally. Sally agreed...
10.  Jack has a friend, Mike, who recently sold his car to another friend, Sally. Sally agreed to pay Mike $10,750 in 9 months 4 months ago and signed a note to that effect. Unfortunately, Mike needs some cash now. Jack agrees to take the note off of Mike’s hands for $10,300. What annual simple interest rate will Jack earn when Sally pays him at the end of the time period? 11.Kari wants to save for her kid’s college education. She...
10.  Jack has a friend, Mike, who recently sold his car to another friend, Sally. Sally agreed...
10.  Jack has a friend, Mike, who recently sold his car to another friend, Sally. Sally agreed to pay Mike $10,750 in 9 months 4 months ago and signed a note to that effect. Unfortunately, Mike needs some cash now. Jack agrees to take the note off of Mike’s hands for $10,300. What annual simple interest rate will Jack earn when Sally pays him at the end of the time period?
Your friend Jack offers you the opportunity to invest in his new business that sells the...
Your friend Jack offers you the opportunity to invest in his new business that sells the best lemonade in the world, or so he says. Jack says that there is a 60% chance that the investment will be worth $200,000 one year from today, and a 40% chance it won’t be worth anything. If you require a risk premium of 8% and T-bills are currently paying 4% per year, what price will you be willing to pay Jack for the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT