BAC 321-During 2016, John was the chief executive officer and a share

BAC 321-During 2016, John was the chief executive officer and a share

Research Problem 1. During 2016, John was the chief executive officer and a share- holder of Maze, Inc. He owned 60% of the outstanding stock of Maze. In 2013, John and Maze, as co-borrowers, obtained a $100,000 loan from United National Bank. This loan was secured by John’s personal residence. Although Maze was listed as a co-borrower, John repaid the loan in full in 2016. On Maze’s Form 1120 tax returns, no loans from shareholders were reported. Discuss whether John is entitled to a bad debt deduction for the amount of the payment on the loan.