_____ 13. When a corporation lends money to an employee at below-market interest rates, the imputed interest is additional compensation to the employee.

Question

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When a corporation lends money to an employee at below-market interest rates, the difference between the market interest rate and the actual interest rate is considered additional compensation to the employee and is therefore subject to taxes. This is known as imputed interest.

_____ 13 When a Corporation Lends Money to an Employee at at Below-Market