Hope Springs, a teacher, loaned Hugh Owens, a friend, $10,000 to invest in real estate. Hugh declared bankruptcy in 2019 and cannot repay the $10,000.
a. What is the nature of Hope's loss?
b. Assuming Hope has no other capital transactions, is there a limit on the amount she may deduct for 2019? Explain.
c. What amount of the loss may Hope deduct in 2019?

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The Answer of Hope Springs, a teacher, loaned Hugh Owens, a friend, $10,000 to invest in real estate. Hugh declared bankruptcy in 2019 and cannot repay the $10,000.
a. What is the nature of Hope's loss?
b. Assuming Hope has no other capital transactions, is there a limit on the amount she may deduct for 2019? Explain.
c. What amount of the loss may Hope deduct in 2019?

Hope Springs, a Teacher, Loaned Hugh Owens, a Friend, $10,000