Your borrower has filed Form 4952: Investment Interest Expense Deduction with last year’s tax returns. The form reports $2,000 ininterest expense paid by a partnership. What was the impact on theborrower’s cash flow for last year?

A. The cash flow impact is an outflow of $2,000, because this isreported on the individual tax return.
B. The cash flow impact is an outflow of $1,000, split evenlybetween the taxpayer and the partnership.
C. The cash flow impact is an inflow of $2,000, because this isreported on the individual tax return.
D. There is no cash flow impact, since the investment interest waspaid by the partnership.

Answer rating: 100% (QA)

D There is no cash flow impact since the i... View the full answer