Question: Stock in Jaybird Corporation 555 Industry Lane Pueblo CO 81001

Stock in Jaybird Corporation (555 Industry Lane, Pueblo, CO 81001) is held equally by Vera, Wade, and Wes. Jaybird seeks additional capital in the amount of $900,000 to construct a building. Vera, Wade, and Wes each propose to lend Jaybird Corporation $300,000, taking from Jaybird a $300,000 four-year note with interest payable annually at two points below the prime rate. Jaybird Corporation has current taxable income of $2 million. You represent Jaybird Corporation.
Jaybird's president, Steve Ferguson, asks you how the payments on the notes might be treated for tax purposes. Prepare a letter to Ferguson and a memo for your tax files in which you document your conclusions.

Sale on SolutionInn
  • CreatedSeptember 09, 2015
  • Files Included
Post your question