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Homework answers / question archive / During 201 5 , John was the chief executive officer and a shareholder of Maze, Inc
During 201
5
,
John was the chief executive officer and a shareholder of Maze, Inc. He owned 60% of
the outstanding stock of Maze. In 201
2
, John and Maze, as co
-
borrowers, obtained a $100,000 loan
from the United National Bank. This loan was secured by John's personal
residence.
Alt
hough Maze
was listed as a co
-
borrower, John repaid the loan in full in 201
5
. On Maze's form 1120 tax returns, no
loans from shareholders were reported. Discuss whether John is entitled to a bad debt deduction for
the amount of the payment o
n the loan. (
See textbook for additional information for this problem
)
.
In the given question, it is a compulsory anticipation on the portion of Maze to legwork equal in his Income Tax return with regard to the loan that is borrowed by him from United National Bank in the capacity as Co- Borrower. That's why Mr. John is entitled to a bad debt deduction for the amount of the payment made on the loan.
