In 2017 Bonnie, a sole proprietor, loaned her employee, John, $10,000 to help him buy a car. In 2019, before he repaid the $10,000, Bonnie told John that she was "tearing up" the $10,000 note in recognition of his strong job performance. How should John treat the amount forgiven?
A. taxable income in year of loan
B. excludible gift in year of forgiveness
C. taxable income in year of forgiveness
D. excludible gift in year of loan
Answer: C
You might also like to view...
A country engages in a contractionary monetary policy that causes its income to decline and its interest rate to rise. This causes investors from other countries to increase their financial investments in that country, causing the interest rate in the investors' countries to rise. In this case, the business cycle is being transmitted internationally through ____ effect.
A. a trade B. an interest-rate C. an exchange-rate D. an expected-inflation
Ford Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing $150,000 was sold for its book value in Year 2. There were no other equipment purchases or sales during the year. The following selected information is available for Ford Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.At December 31Year 2Year 1Equipment$600,000 $750,000 Accumulated Depreciation-Equipment 428,000 500,000
A. $40,000. B. $38,000. C. $36,000. D. $32,000. E. $68,000.
Which of the following financial intermediaries operates as a not-for-profit organization?
A. Commercial bank B. Credit union C. Thrift institution D. Mutual fund E. Whole-life insurance company
With regard to queuing theory, define what is meant by reneging
What will be an ideal response?