W is an entrepreneur. He owns numerous companies including Guns Corporation. He also serves as the corporations chief financial officer. Because of bad publicity relating to assault weapons and fire arms in general, the corporations sales suffered this year. As a result, W advanced $30,000 to the corporation and received a note. Subsequently, legislation was passed which put the corporation out of business and Ws loan became worthless. a. Assuming that the loan was to protect Ws investment, he may treat the $30,000 as an ordinary loss. b. Assuming that the loan was to protect Ws employment, he may treat the $30,000 as a short term capital loss.

c. Assuming that the loan was to protect Ws employment, he may treat the $30,000 as a business bad debt and deduct it as an ordinary loss. d Assuming that the loan was to protect Ws employment, he may treat the $30,000 as a business bad debt and deduct it to the extent of his capital gains plus $3,000. e. The treatment of the $30,000 will be the same regardless of Ws motivation for the loan.