Week 2 Assignments Tax

19 below market loan rules apply when the irs imputes

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19. Below market loan rules apply when the IRS imputes interest on loans with no, or low, interest rates. The lender has to recognize interest income that’s equal to the IRS imputed interest and the borrower has an implied interest payment to the lender. 24. I don’t understand Chapter 4: 7. Fritz: 2000 Tad: 2000 @ 30% discount @ 20% discount $600 saved $400 saved Since the savings plan favors key employees, Fritz must include the $600 in his gross income. But, Tad (the unflavored) odes not have to include his $400 in his gross income. 14. Initial IRA limit: $5,000+$1,000 (due to 50+)=$6,000 Reduction factor: [($175,520 – $173,000)/$10,000] x $6,000 =$1,512 Contribution limit:
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$6000-$1512= $4,488, rounded to the nearest $10 = $4,490 So, the maximum amount each can invest in their respective Roth IRAs is $4,490. 19. Jimmy’s moving expenses: Expenses of moving household items 4,500 Travel and lodging for family in moving 345 Meals en route 72 Pre-move house-hunting trips 925 Temporary living expenses in new location 700 Real Estate commission on sale of old home +12,000 Total Moving Expenses $18,542 However, not all of these expenses are deductible: Expenses of moving household items 4,500 Travel and lodging for family in moving 345 Meals en route 72 Pre-move house-hunting trips 925 Temporary living expenses in new location 700 Real Estate commission on sale of old home +12,000 Total Moving Expenses $18,542 Total Deductible Moving Expenses $4,845
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19 Below market loan rules apply when the IRS imputes...

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