Karyn loaned $32,000 to her co-worker to begin a new business several years ago. If her co worker declares bankruptcy on june 22 of the current year, how much of the bad debt loss will Karyn be able to deduct this year?
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Karyn loaned $32,000 to her co-worker to begin a new business several years ago. If her co worker declares bankruptcy on june 22 of the current year, how much of the
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- Joy incurs the following expenses in her business. When can she deduct the expenses if she uses the accrual method of accounting? the cash method? a. Joy rents an office building for 750 a month. Because of a cash flow problem, she is unable to pay the rent for November and December 2019. On January 5, 2019, Joy pays the 2,250 rent due for November, December, and January. b. Joy borrows 60,000 on a 1-year note on October 1, 2019. To get the loan, she has to prepay 6,200 in interest. c. Joy owes employees accrued wages totaling 20,000 as of December 31, 2019. The accrued wages are paid in the regular payroll on January 5, 2020. d. Joy purchases 2,400 worth of supplies from a local vendor. The supplies are delivered on January 29, 2019. They are fully used up on December 30, 2019. Because of unusual circumstances, a bill for the supplies arrives from the vendor on January 10, 2020, and is promptly paid. e. While at a trade convention, Joy purchases some pens and paperweights to send out as holiday gifts to her clients. She charges the 700 cost to her credit card in December 2019. She pays the credit card bill in January 2020.Kate acquires a principal residence in 2017 for $200,000 secured by a $180,000 mortgage. In 2021, Kate catches the coronavirus and misses work for 3 months. Her employer stops paying her after 10 days. In 2021 when the mortgage balance is $170,000, Kate and the bank revise her terms and lower the loan balance to $150,000. The market value of the home remains above $200,000. How much cancellation of debt income will Kate recognize?Shirley's employer just filed for bankruptcy protection from their creditors. She has been an employee for 27 years. She is fully vested in her pension plan and has a $430,000 balance in her 401(k) plan. She lost her $75,000 salary job, but her pension is supposed to pay $43,000 per year. What will be her outcome from the bankruptcy? She lost her pension and 401(k) to the creditors of her employer because the assets belong to the company. Her full pension is guaranteed, but she lost her 401(k) to the creditors of her employer because the assets belong to the company. Her full pension is guaranteed and her 401(k) is not available to her employer or its creditors. She lost her pension to the creditors of her employer because the assets belong to the company, but her 401(k) is not available to her employer or its creditors. Save for Later Submit Answer ОО
- Vic, who was experiencing financial difficulties, was able to adjust his debts as follows: a. Vic is an attorney. Vic owed his uncle $25,000. The uncle told Vic that if he serves as the executor of the uncle's estate, Vic's debt will be canceled in the uncle's will. The $25,000 debt cancellation is Vic's gross income when the uncle dies. b. Vic borrowed $80,000 from First Bank. The debt was secured by land that Vic purchased for $100,000. Vic was unable to pay, and the bank foreclosed when the liability was $80,000, which was also the fair market value of the property. Vic has a $fill in the blank 01cf0405cfe7044_1 as a result of the foreclosure. c. The Land Company, which had sold land to Vic for $80,000, reduced the mortgage on the land by $12,000. The $12,000 reduction in the debt is Vic's gross income and Vic must his basis in the property.Elsie had an AGI of $105,000 in 2018. All of her income was from wages. Elsie owned a rental house and actively participated in the management of the rental house. The rental house generated losses of $25,000 in 2018. Elsie has over $100,000 at risk. What amount of the $25,000 loss can Elsie deduct in 2018?Unfortunately, Betty’s business was not profitable. She decided to sell the business andseek work in a different industry. She sold her business in May 2020 after spending$22,000 on advertising the sale with an estate agent. Unfortunately, the sales proceedswere not sufficient to discharge her existing bank loan and she was required to makeregular monthly interest payments on the outstanding balance.Please discuss whether the advertising expenses would be deductible
- George lost his $155,000 sales job. It took him a year to find a new job and, during that time, his utilities were shut off, he foreclosedon his home, and he declared bankruptcy. Ten years from now, what information from this time will remain on his credit report?Hope Springs, a teacher, loaned Hugh Owens, a friend, $10,000 to invest in real estate. Hugh declared bankruptcy in 2019 and cannot repay the $10,000. What is the nature of Hope’s loss? Assuming Hope has no other capital transactions, is there a limit on the amount she may deduct for 2019? Explain. c. What amount of the loss may Hope deduct in 2019 if she has a Short-Term Capital Gain of $5,000?Carrie loaned her friend $4500 to buy a used car. She had her friend sign a note with repayment terms and set a reasonable interest rate on the note because the $4500 was most of her savings. Her friend left town with out a forwarding address, and nobody Carrie knows has heard from her in the last year. How should Carrie treat the bad loan for tax purpose? This is a ___________ bad debt. Assuming this is carries only capital gain or loss, she may claim $____________in the current year and __________any remaining amount.
- Bree and Kyle are not related. During 2020, Bree loans Kyle $15,000, which he intends to use to establish a small business. Under the terms of the loan Kyle agrees to repay Bree the $15,000 plus interest (at a reasonable stated rate) over a five-year period. The business is unsuccessful, and Kyle is forced to file for bankruptcy in 2021. By the end of 2021, it is estimated that the creditors will receive only 25% of the amount owed. In 2022 the bankruptcy proceedings are closed, and the creditors receive 10% of the amount due on the debt. Requirement What is Bree's bad debt deduction for 2021? For 2022? (Complete all input fields. Enter a "0" if no bad debt deduction can be taken.) Bree's bad debt deduction for 2021 will be Bree's bad debt deduction for 2022 will beWill purchased a home for $350,000 five years ago. He did significant renovations and additions increasing the value to $425,000. He forgot to update his original policy limits of $280,000. He incurred a $100,000 loss by fire. He has a $2,500 deductible. How much will he be responsible for after accounting for the amount his insurer will pay? In other words, how much of the loss will his insurer not pay?During 2020, Brandi loans her brother Keefer $40,000, which he intends to use to establish a small business. Because Keefer has no other assets and needs cash to establish the business, the agreement provides that Keefer will repay the debt if (and when) sufficient funds are generated from the business. Brandi and Keefer do not establish an interest rate. The business is unsuccessful, and Keefer is forced to file for bankruptcy in 2021. By the end of 2021, it is estimated that the creditors will receive only 50% of the amount owed. In 2022 the bankruptcy proceedings are closed, and the creditors receive 25% of the amount due on the debt. Requirement What is Brandi's bad debt deduction for 2021? For 2022? (Complete all input fields. Enter a "0" if no bad debt deduction can be taken.) Brandi's bad debt deduction for 2021 will be Brandi's bad debt deduction for 2022 will be
