She pays her employer $1,000 on September 30 to decrease the loan. Her taxable benefit from the loan is $180 for the year.

Question

Quizplus · Accepted Answer

The taxable benefit from the loan would be calculated based on the prescribed interest rate for the period the loan was outstanding, minus any interest she actually paid by the due date for the year. Paying $1,000 on the loan principal does not directly determine the taxable benefit, which is more closely related to the interest rate and payment timing.

She Pays Her Employer $1,000 on September 30 to Decrease