Question: If a loan is repaid, the lender does not have to include the principal portion of the payment in gross income. There is no exclusion

If a loan is repaid, the lender does not have to include the principal portion of the payment in gross income. There is no exclusion in the tax law that permits taxpayers to omit such amounts from gross income. How can this be explained?

Step by Step Solution

★★★★★

3.31 Rating (180 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

A loan repayment is not consistent with the normal ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (2 attachments)

1445_6054778c0b8bf_641641.pdf

180 KBs PDF File

1445_6054778c0b8bf_641641.docx

120 KBs Word File

Students Have Also Explored These Related Federal Taxation Questions!

Does advertising cost too much? How can this be measured?

A substitution cipher does not have to be a character-to-character transformation. In a Polybius cipher, each letter in the plaintext is encrypted as two integers. The key is a 5 Ã 5 matrix of...

In Problems 6374, perform the indicated operations and simplify the result. Leave your answer in factored form. 3x x - 1 x - 4 18 x - 2x + 1 2

An encryption-decryption system consists of three elements: encode, transmit, and decode. A faulty encode occurs in 0.5% of the messages processed, transmission errors occur in 1% of the messages,...

A growing anticorruption campaign in India has a clever new tool: a zero-rupee note. The impressive note looks just like a 50-rupee note, but is clearly marked as being worthless and contains...

What is the (a) fat pencil test? (b) quantity plotted in a normal probability plot to check the normal assumption of the simple linear regression model?

The Excel file Accounting Professionals provides the results of a survey of 27 employees in a tax division of a Fortune 100 company. a. Test the null hypothesis that the average number of years of...

A . Prepare a pro forma income statement for next year, using the percent - of - sales method. b . Prepare a pro forma balance sheet for next year, using the judgmental approach. c . Analyze these...

U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Depreciation is computed by the...

Find the area of each figure. 1. 2. foot Rectangle foot Square meter ralm

Aguila Corporation produces a single product. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The standard costs for one unit of product are as follows:...

Schedule of Cost of Goods Manufactured and Sold At December 31, 2019, the end of its fiscal year, Lederman Manufacturing Corporation collected the following data for 2019: BusinessCourse Return to...

Matching: The impact of recycling The impact of city-wide recycling and composting initiatives in major Canadian cities The impact of city-wide composting programs in South Vancouver to 1. Too narrow...

Finally, come up with a procedure for assigning a single number "best estimate" and an associated "uncertainty" for each case. By procedure we mean a formula (or else at least an algorithm) which...

Problem 9.07 The water tank has a rectangular crack on its side having a width of 100 mm and an average opening of 0.1 mm Laminar flow occurs through the crack. The water is at a temperature of...

17.6. Bootstrap equations Derive the bootstrap equations (17.4.68) imposing the commutativity of the processes shown in Figure (17.13). Hint. Note that the line of the particle Ai in the second graph...

Briefly describe the following types of group life insurance plans: a. Group term life insurance b. Group accidental death and dismemberment insurance (AD&D) c. Group universal life insurance d....

During 2015, Angela sustains serious injuries from a snow-skiing accident. She incurs the following expenses: Item Amount Doctor bills .. $11,700 Hospital bills . 9,400 Legal fees in suit against ski...

Assume the same facts as in Problem 7-35. In addition, assume that in 2016, Angela receives an additional $7,000 in a settlement of a lawsuit arising because of the snow-skiing accident. $4,000 of...

Dan lives in Duncan, a small town in Arizona. Because of a rare blood disease, Dan is required to take special medical treatments once a month. The closest place these treatments are available to Dan...

A cost analysis is to be made to determine what, if anything, should be done in a situation offering three "do-something" and one "do-nothing" alternatives. Estimates of the cost and benefits are as...

Quilcene Oysteria farms and sells oysters in the Pacifio Northwest. The company horvested and sold 7,200 pounds of oysters in August. The company's flexible budget for August appears below: The...

1. Again, the chickenegg problem! A chicken lays a number of eggs, N, which follows a Poisson[)\\) distribution. Each egg hatches a chick with probability 33, independently. Let X be the number of...