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Finger [1]
3 years ago
13

Monty loaned his friend Ned $12,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remain

ing balance was $9,000, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $9,000 as a nonbusiness bad debt. Last year, before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $3,600 and taxable income of $33,250. During the current year, Ned paid Monty $8,100 in satisfaction of the debt.
Determine Monty's tax treatment for the $8,100 received in the current year.

The nonbusiness bad debt of $9,000 would have been reported as a short-term capital loss , and $_________ would be included in Monty's gross income.
Business
1 answer:
irinina [24]3 years ago
7 0

Answer:

$ 6,600

Explanation:

Monty should $\text{includ}$e up to $\$ 8,100$ in the gross account but to an extent of the tax benefit in the previous year. Since the debt is a non-business debt, the amount of $\$ 9,000$ would be reported as the short term business capital loss.

In the previous year, Monty had a capital gain of $\$ 3,600$ and $\$33,250$ as taxable income.

Therefore, $ 3,600 + $ 3,000 = $ 6,600

So $ 6,600 out of $ 9,000 loss produced the tax benefit. Therefore, only $\$6,000$ can be included in the gross income of Monty for this year.

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Answer:

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They are focused on a specific kind of skilled training which you can use in your career. Technical education is also known by the name of a diploma which can be completed in a period of 2 years or even in a period of months.

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