Celine opens a jewelry store during the current year. She invests $20,000 of her own money and

Question:

Celine opens a jewelry store during the current year. She invests $20,000 of her own money and receives a nonrecourse bank loan of $80,000. During the current year, the store has a loss of $24,000.
Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify.