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1 (Chapter 7) (a) In 2010 Jim loaned Patti $4,500, as a personal loan. In 2014 (when the outstanding loan is still $4,500), Patti informs
1 (Chapter 7) (a) In 2010 Jim loaned Patti $4,500, as a personal loan. In 2014 (when the outstanding loan is still $4,500), Patti informs Jim that she will not be able to repay the loan. In 2014, Jim has $1,000 short-term capital gain and $40,000 wage income. In 2015, Patti repays the $4,500. How much, if any, of that does Jim have to include in his income for 2015? (b) Suppose, instead, that the loan in part (a) was a business loan. How much, if any, of the 2015 repayment does Jim need to include in his income? + 1)
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