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Corporation A lends $25,000 to Individual. Individual owns 15% of Corporation A's common stock. Corporation A is not in the business of lending money and
Corporation A lends $25,000 to Individual. Individual owns 15% of Corporation A's common stock. Corporation A is not in the business of lending money and only agreed to the transaction because Individual assured Corporation A that the loan would be fully paid back within one year. Unfortunately, Individual is unable to pay the loan back and declares bankruptcy in the current year. How much of the loan is considered a "nonbusiness bad debt" by Corporation A in the current year
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