The Robin Corporation is owned as follows: Isabelle .......................................... 26% Peter, Isabelle's husband....................... 19% Sonya, Isabelle's mother

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The Robin Corporation is owned as follows:
Isabelle .......................................... 26%
Peter, Isabelle's husband....................... 19%
Sonya, Isabelle's mother ..................... 15%
Reggie, Isabelle's father ...................... 25%
Quinn, an unrelated party .....................15%
Robin is on the accrual basis, and Isabelle and Peter are on the cash basis. Isabelle and Peter each loaned the Robin Corporation $40,000 out of their separate funds. On December 31, 2013, Robin accrued interest at 7% on both loans. The interest was paid on February 4, 2014. What is the tax treatment of this interest expense/income to Isabelle, Peter, and Robin?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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South Western Federal Taxation 2014 Comprehensive Volume

ISBN: 9781285180922

37th Edition

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young

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