On December 1, Raphael Renoir borrows $20,000 from the bank on a 15 percent, one-year business loan.
Question:
On December 1, Raphael Renoir borrows $20,000 from the bank on a 15 percent, one-year business loan. Raphael prepays the interest of $3,000 at the time of the loan. What is the interest deduction allowed Raphael, assuming he is a cash basis, calendar year taxpayer? What would your answer be if, instead of prepaying the $3,000 interest, it was deducted from the loan proceeds?
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If Raphael Renoir is a cash basis taxpayer the interest deduction is generally allowed in ...View the full answer
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Related Book For 
CCH Federal Taxation Basic Principles 2020
ISBN: 9780808051787
2020 Edition
Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback
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