our client’s mother had always told her to avoid slacker guys. But she hooked up with one anyway because he was such a charmer. In fact, pretty soon he had charmed her into loaning him $200,000 for a “business venture” that he was con-vinced would make them both rich… When your client finally figured out that Mr. Charmer was not as advertised, she broke up with him. Naturally, he paid her back for the breakup by never paying her back. Can your client deduct the $200,000 that she’ll never see again? If so, as an ordinary loss or a capital loss, and why?
our client’s mother had always told her to avoid slacker guys. But she hooked up with one anyway because he was such a charmer. In fact, pretty soon he had charmed her into loaning him $200,000 for a “business venture” that he was con-vinced would make them both rich… When your client finally figured out that Mr. Charmer was not as advertised, she broke up with him. Naturally, he paid her back for the breakup by never paying her back. Can your client deduct the $200,000 that she’ll never see again? If so, as an ordinary loss or a capital loss, and why?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Your client’s mother had always told her to avoid slacker guys. But she hooked up with one anyway because he was such a charmer. In fact, pretty soon he had charmed her into loaning him $200,000 for a “business venture” that he was con-vinced would make them both rich…
When your client finally figured out that Mr. Charmer was not as advertised, she broke up with him. Naturally, he paid her back for the breakup by never paying her back. Can your client deduct the $200,000 that she’ll never see again? If so, as an ordinary loss or a capital loss, and why?
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