The general rule is that loans made to shareholders must be included in the shareholder's income in the year that the proceeds are received. There are, however, a number of exceptions to this rule. Which of the following is NOT an exception to the general rule?
A) A loan to an owner-manager to allow him to purchase a personal residence. The loan does not have a specific repayment date.
B) An interest free loan to a shareholder of a bank.
C) A loan to an owner-manager to acquire an automobile that he will use in working for the company. The company has no other employees.
D) A loan extended to an owner manager that must be repaid within two years. The company has a December 31 year end and the loan is extended on January 1 of the current year.
Correct Answer:
Verified
Q39: The use of a corporation can facilitate
Q41: Which of the following factors is NOT
Q42: The use of a corporation to provide
Q44: While of the following statement about income
Q45: Which of the following factors is NOT
Q46: The use of a corporation is most
Q48: Joan Farnun has employment income of about
Q82: All other things being equal, higher provincial
Q85: Income splitting refers to procedures which are
Q112: With respect to the incorporation of a
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