On June 2, 2014, Morgan's TV sales sold Carl a large HD TV, account, for $12,000. Morgan's TV sales uses the accrual method. In 2015, when the balance on the account was $8,000, Carl filed for bankruptcy. Morgan was notified that he could not expect to receive any of the amount owed to him. In 2015, final settlement was made and Morgan received $1,000. How much bad debt loss can Morgan deduct in 2015? a) $7,000 b) $0 c)$12,000 d) $8,000 e) None of the above. Which of the following is not a related party for constructive ownership purposes under 267? a) The taxpayer's fiance. b) The taxpayer's brother. c) The taxpayer's grandmother. d) A corporation owned more than 50% by the taxpayer. e) None of the above. Identify the factors that indicate that a taxpayer is engaged in a trade or business. a) The activity is conducted regularly with an intent to make a profit. b) The activity is conducted continuously with an intent to make a profit. c) The activity is conducted regularly or continuously with an intent to make a profit. d) The activity is conducted regularly and continuously and a profit must be made within 5 years. e) The activity is conducted regularly and continuously with an intent to make a profit. Beth performs services for Dawn. Which, if any, of the following factors indicate that Beth is an independent contractor, rather than an employee? a) Dawn sets the work schedule for Beth. b) Dawn provides the tools used by Beth. c) Beth files a Form 2106 with her Form 1040. d) Beth is paid based on tasks performed. e) None of the above