Problem $3-18$

Bad Debts $($LO $3\mathrm{.}10)$

Steinar loaned a friend $$9,500$ to buy some stock $3$ years ago. In the current year the debt became worthless.

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a$.$ How much is Steinar's deduction for the bad debt for this year? $($Assume he has no other capital gains or losses.$)$

fill in the blank $1$ of $1$$

as a

nonbusiness

bad debt.

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b$.$ What can Steinar do with the deduction not used this year?

The remaining fill in the blank $1$ of $3$$

can be carried forward as a fill in the blank $2$ of $3$

short$-$term capital loss

and deducted in future years, subject to fill in the blank $3$ of $3$

an annual limitation

$.$