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Several years ago, R’s son, S, got into the restaurant business. R loaned S $10,000 to help him get the business going. No note was signed nor was any interest charged. The business was initially a huge success but as time passed, it began having financial problems. This year the son’s business failed.
Can R claim a bad debt deduction? If so, is the debt a business or non-business bad debt and how much is the deduction?
Same as (a) except R obtained a signed note from his son.
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