Emmett loaned Baker $10,000. Baker filed for bankruptcy
last year, and Emmett was notified that Emmett would receive $.20
on the dollar. In the current year, Emmett received $1,500 as
a final settlement. The loan is nonbusiness. How should
Emmett report the loss?
$8,000 short-term capital loss last year and $500 ordinary loss
in the current year.
$8,000 short-term capital loss last year and $500 capital loss
in the current year.
$8,500 ordinary loss in the current year.
$8,500 short-term capital loss in the current year