Question

Exercise 6-1 (Algorithmic) (LO. 1).

Last year, Jane identified $80,400 as a nonbusiness bad debt. In that tax year before considering the tax implications of the nonbusiness bad debt, Jane had $160,800 of taxable income, of which $8,040 consisted of short-term capital gains. This year, Jane collected $16,080 of the amount she had previously identified as a bad debt.

Jane treats the $80,400 nonbusiness bad debt as a short-term capital loss of which $______is carried over to the current year. Jane would have to include_____ $ of the collection in gross income in the current year, resulting in a remaining carryover of $________?

Answer 1

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