Some years ago, Jerry Jones, who is in the lending business, loaned Sarah Mosses $$30,000$ to purchase an automobile

to be used for personal purposes. In August of the current year, Sarah filed for bankruptcy after she had paid back

$$10,000$ of the loan to Jerry. Jerry was notified by the bankruptcy court that he could not expect to receive more than

an additional $$4,000.$ Please respond to the questions below.

Read IRS Tax Topic # $453$ Bad Debt Deduction for more specific information. Also see, IRS Publications $550$ and $535$ at

IRS.gov.

What amount, if any, may Jerry deduct in the current year as a business bad debt expense? Please show any

calculations.