Janine's employer loaned her $5,000 this year (interest-free) to buy a used car. If the federal interest rate was 4%, which of the following is correct?
A) Janine recognizes $200 of taxable interest income.
B) Janine's employer recognizes $200 of deductible interest expense.
C) Janine recognizes $200 of imputed compensation income.
D) Janine recognizes $200 of imputed dividend income.
E) None of the choices are correct.
Correct Answer:
Verified
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