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

Answer rating: 100% (QA)

Answer Solution Option1 Explanation i Option1 will be correct A loss for the nonbu... View the full answer