Brock made an interest-free loan to his nephew, Collin, of $60,000, who used the loan to...

Transcribed Image Text:

Brock made an interest-free loan to his nephew, Collin, of $60,000, who used the loan to by bonds. Collin received $800 bond interest and had no other income this year. Assuming, the loan was made on January 1st and the relevant Federal interest rate is 3%, how much interest income must Brock recognize resulting from the loan? Brock made an interest-free loan to his nephew, Collin, of $60,000, who used the loan to by bonds. Collin received $800 bond interest and had no other income this year. Assuming, the loan was made on January 1st and the relevant Federal interest rate is 3%, how much interest income must Brock recognize resulting from the loan?

Answer rating: 100% (QA)

Under the tax laws if a lender makes an interestfree loan the lender is deemed to have made a gift t... View the full answer