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During 201 5 , John was the chief executive officer and a shareholder of Maze, Inc

Accounting

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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

)

.