Rebecca is a 20% part owner in a bar. Sheinvested $100,000 for her ownershipinterest. She also works as a manager of thebar and is paid $50,000/year. Due to financialdifficulties of the bar, she loans it $100,000in 2013. Nevertheless, the bar goes bankruptin 2014 and the trustees tell Rebecca shecan expect no better than $10,000 back onher $100,000 loan, although the case will bein bankruptcy for several more years. Whatare the 2014 tax consequences to Rebeccafrom the loan? Explain in full.

Given in the question: Rebecca is the owner of the bar but her interest is only 20% for which she…

Answered: in bankruptcy for several more years.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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in bankruptcy for several more years. What are the 2014 tax consequences to Rebecca from the loan? Explain in full.