Question
Last May, Jim Smith loaned $5,000 to his long-time coworker John Doe. The loan was not intended to be a gift. Unfortunately John passed away
Last May, Jim Smith loaned $5,000 to his long-time coworker John Doe. The loan was not intended to be a gift. Unfortunately John passed away this October before he could repay the loan and Jim could not recover any of the $5,000. Can Jim deduct this non-business bad debt loss? Select one: a. Yes but as a short-term capital loss and subject to deduction limit per year O b. Yes the loss can reduce Jim's salaries income and income from other sources c. No this loss is not deductible d. Yes but as a long-term capital loss and subject to deduction limit per year
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