Exam Question $1$

For a bad$-$debt deduction on a worthless loan to a related shareholder, the corporation must produce:

A a payment plan and proof that at least five payments had been made from the related shareholder to the corporation.

B a written loan agreement and evidence that the related shareholder is in bankruptcy.

C evidence that the loan was a valid debtor$-$creditor relationship and that both parties intended for the loan to be repaid.

D proof it was recorded as a receivable.