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Last year, Jane identified $52,400 as a nonbusiness bad debt. In that tax year before considering the tax implications of the nonbusiness bad debt, Jane had $104,800 of taxable income, of which $5,240 consisted of short-term capital gains. This year, Jane collected $10,480 of the amount she had previously identified as a bad debt.
1.Jane deducted an overall $3,000 net short-term capital loss in the past year.
2.Therefore, Jane would have to include
$ ______ in gross income in the current year. ( Please explain how to get this. Thank you )
Expert Answer
If the account was written off during the previous taxable year and the same is recovered in current year ,the amount recovered should be included in gross income of current year.
so Jane should include $ 10480 in gross income in current year
