Question

Last year, Aleshia identified $4,400 as a nonbusiness bad debt. In that tax year before considering the tax implications of the nonbusiness bad debt, Aleshia had $8,800 of taxable income, of which $3,080 consisted of short-term capital gains. This year, Aleshia collected $3,696 of the amount she had previously identified as a bad debt. Determine Aleshia's tax treatment of the $3,696 received in the current tax year.

Answer 1

The amount of $3,696 would be involved in her gross wage

Step-by-step explanation:

The computation of the tax treatment is as follows

Since in the question it is mentioned that the amount of $3,696 amount was collected that identified as a bad debt so the amount of $3,696 would be involved in her gross wage

Therefore the same is to be considered

And, the rest of the information i.e. given are to be ignored