Sarah a majority shareholder in teal inc made a

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South-Western Federal Taxation 2020: Comprehensive
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Chapter 1 / Exercise 7
South-Western Federal Taxation 2020: Comprehensive
Maloney/Raabe/Young
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91. Sarah, a majority shareholder in Teal, Inc., made a $200,000 interest-free loan to the corporation. Sarah is not an employee of the corporation.
92. The effects of a below-market loan for $100,000 made by a corporation to its chief executive officer as an enticement to get him to remain with the company are:
93. Sharon made a $60,000 interest-free loan to her son, Todd, who used the money to start a new business. Todd’s only sources of income were $25,000 from the business and $490 of interest on his checking account. The relevant Federal interest rate was 5%. Based on the above information:
94. Jay, a single taxpayer, retired from his job as a public school teacher in 2016. He is to receivea retirement annuity of $1,200 each month and his life expectancy is 180 months. He contributed$36,000 to the pension plan during his 35-year career; so his adjusted basis is $36,000. Jay collected 192 payments before he died. What is the correct method for reporting the pension income?
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South-Western Federal Taxation 2020: Comprehensive
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Chapter 1 / Exercise 7
South-Western Federal Taxation 2020: Comprehensive
Maloney/Raabe/Young
Expert Verified
95. In 2016 Todd purchased an annuity for $150,000. The annuity is to pay him $2,500 per month for the rest of his life. His life expectancy is 100 months. Which of the following is correct?c. For each $2,500 payment received in the first year, Todd must include $1,000 in gross income.
96. Mark a calendar year taxpayer, purchased an annuity for $50,000 in 2014. The annuity was topay him $3,000 on the first day of each year, beginning in 2014, for the remainder of his life. Mark’s life expectancy at the time he purchased the annuity was 20 years. In 2016 Mark developed a deadly disease, and doctors estimated that he would live for no more than 24 months.a. If Mark dies in 2017, a loss can be claimed on his final return for his unrecovered costof the annuity.

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