In Year 1, Tom, a friend of Marvin, loaned Marvin $50,000 to start a small craft shop. The business failed in Year 2, and Marvin could not pay Tom back. For Year 2, Tom has AGI of $200,000. How will Tom treat this bad debt on his tax return for Year 2? A Although Tom is out his hard-earned cash, he cannot deduct the bad debt since he is a cash-basis taxpayer. Tom will be allowed a business bad-debt deduction, generating an ordinary loss of $50,000. B U C Tom will deduct the $50,000 as a casualty loss. D Tom will have a non-business bad debt deduction, generating a short-term capital loss of $50,000