On January 1, Jeff loans his friend Patrick $7,000 to buy a used car. Patrick signs a noninterest-bearing demand note. The applicable interest rate is 5%. Which of the following statements is correct?
A) Jeff has made a taxable gift to Patrick of $3,500.
B) Jeff must report interest income of $3,500 from Patrick.
C) Jeff has made a gift to Patrick that is not taxable since it is less than $11,000.
D) Interest does not have to be imputed on the gift since the loan amount is less than $10,000 and does not have a tax avoidance motive.
Correct Answer:
Verified
Q95: In 2020, Letty makes taxable gifts totaling
Q96: Roger makes a $1,000,000 cash gift on
Q97: Miguel gives Roberta land with an adjusted
Q98: Discuss at least two reasons for making
Q99: Tracy gave stock with an adjusted basis
Q101: What is the due date for the
Q102: Which of the following situations requires that
Q103: Describe the penalties for undervaluing gifts on
Q104: Identify which of the following statements is
Q105: Which of the following statements is true?
A)If
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents