The effects of a below market loan for 100000 made by

This preview shows page 31 - 34 out of 46 pages.

We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
South-Western Federal Taxation 2020: Corporations, Partnerships, Estates and Trusts
The document you are viewing contains questions related to this textbook.
Chapter 10 / Exercise 47
South-Western Federal Taxation 2020: Corporations, Partnerships, Estates and Trusts
Raabe/Young/Nellen/Hoffman
Expert Verified
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: a. The corporation has imputed interest income and the employee is deemed to have received a gift. b. The corporation has imputed interest income and dividends paid. c. The employee has no income unless the funds are invested and produce investment income for the year. d. The employee has imputed compensation income and the corporation has imputed interest income. e. None of these. ANSWER: d RATIONALE: The corporation made a compensation related loan. It has imputed interest income and compensation expense. The employee has imputed interest expense and compensation income. Since the loan is for $100,000, the $10,000 exception does not apply.
93. Sharon made a $60,000 interestfree 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 2014. He is to receive a 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? ×
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
South-Western Federal Taxation 2020: Corporations, Partnerships, Estates and Trusts
The document you are viewing contains questions related to this textbook.
Chapter 10 / Exercise 47
South-Western Federal Taxation 2020: Corporations, Partnerships, Estates and Trusts
Raabe/Young/Nellen/Hoffman
Expert Verified
Chapter 4: Gross Income: Concepts and Inclusions $1,200] is excluded from gross income and $1,000 is included in gross income. Any payments received after the 180-month period are included in his gross income.
Chapter 4: Gross Income: Concepts and Inclusions

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture