Joyce's employer loaned her $50,000 this year (interest-free) to buy a new car. If the federal interest rate was 3%, which of the following is correct?
A) Joyce recognizes $1,500 of taxable interest income.
B) Joyce's employer recognizes $1,500 of deductible interest expense.
C) Joyce recognizes $1,500 of imputed compensation income.
D) Joyce recognizes $1,500 of imputed dividend income.
E) None of the choices are correct.
Correct Answer:
Verified
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