On May 1, 2020, Ms. Ponti receives a $210,000 loan from her employer in order to assist her in purchasing a new home. The loan requires no payment of interest, but must be repaid in annual instalments of $30,000 on December 31 in each of the years 2021 through 2027. Assume that the relevant prescribed rate is 4 percent during the first two quarters of 2020, but is reduced to 3 percent in the third quarter, and to 2 percent in the fourth quarter. What is the amount of Ms. Ponti's taxable benefit on this loan for the year?

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The Answer of On May 1, 2020, Ms. Ponti receives a $210,000 loan from her employer in order to assist her in purchasing a new home. The loan requires no payment of interest, but must be repaid in annual instalments of $30,000 on December 31 in each of the years 2021 through 2027. Assume that the relevant prescribed rate is 4 percent during the first two quarters of 2020, but is reduced to 3 percent in the third quarter, and to 2 percent in the fourth quarter. What is the amount of Ms. Ponti's taxable benefit on this loan for the year?