In $2021$ Betty loaned her$$ son, Juan,$$ $$10,000$ to help him buy a car. In$2023,$ before he repaid the$$ $$10,000,$ Betty told Juan that she was$$ "tearing up$"$ the$$ $$10,000$ note as a graduation present. How should Juan treat the amount$$ forgiven?

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Part $1$

A$.$

taxable income in year of loan

B$.$

excludible gift in year of loan

C$.$

taxable income in year of forgiveness

D$.$

excludible gift in year of forgiveness