In 2015 Betty loaned her son,Juan,$10,000 to help him buy a car.In 2017,before he repaid the $10,000,Betty told Juan that she was "tearing up" the $10,000 note as a graduation present.How should Juan treat the amount forgiven?
A) taxable income in year of loan
B) taxable income in year of forgiveness
C) excludible gift in year of loan
D) excludible gift in year of forgiveness
Correct Answer:
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