review the enclosed discussion and respond accordingly

Question 1 Early in 2003, Kay meets Dan through a business associate. Dan tells Kay that he is directing a business venture that purchases poorly managed restaurants in order to turn them around and make them profitable. Dan mentions that he is currently involved in acquiring a real \"goal mine\" but needs to raise additional cash in order to purchase it. On the strength of Dan's representations, Kay loans Dan $30,000 for the venture. An agreement is written up between Kay and Dan, wherein Dan agrees to repay Kay the entire amount over a 5-year period plus 14% interest per annum on the unpaid balance. Later in the year, however, Kay discovers that Dan had never intended to purchase the restaurant and, in fact, had used most of the money for his own benefit. Upon making this discovery, Kay sues Dan for recovery of the money, alleging that Dan falsely, fraudulently, and deceitfully represented that the money would be invested and repaid, in order to cheat and defraud Kay out of her money. Unfortunately for Kay, she is never able to recover any amount of the loan. Discuss the tax treatment that Kay may claim with regard to the loss. Below are some research sources to get you started? Please read these sources and explain your explanation. Please do not copy and paste any information from the below sources. Robert S. Gerstell, 46 T.C. 161 (1966) Michele Monteleone, 34 T.C. 688 (1960) Question 2 Beth, who is married, is the sole shareholder of pet Store, Inc., which is a C corporation. She also manages the store. She wishes to expand the business, but the corporation needs additional capital for her to do so. Fortunately, she has saved $50,000 cash and plans to contribute it to the corporation. However, she doesn't know whether to contribute the cash in exchange for additional stock or lend the $50,000 to the corporation. Prepare a client memo that explains the tax consequences and requirements of each alternative so that Beth can make an informed decision