Ridge is a generous individual. During the year, she made interest-free loans to various family members when the Federal
Posted: Wed Jul 06, 2022 6:26 am
Ridge is a generous individual. During the year, she madeinterest-free loans to various family members when the Federalinterest rate was 3%. What are the Federal tax consequences in 2021of the following loans by Ridge?
If an amount is zero, enter "0".
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a. On June 30, Ridge loaned $12,000 to acousin, Jim, to buy a used truck. Jim's only source of income washis wages on various construction jobs during the year. Thecomputed imputed interest amount for 2021 is $_____.However, the imputed interest is not limited. The imputedinterest rules do not apply. The imputed interest is limited to anamount equal to Jim's net investment income. The imputed interestis limited to an amount equal to Ridge's net investment income. Theimputed interest rules do not apply. This is because the loan wasless than $______ and Jim does not have anyinvestment income.
c. On September 1, Ridge loaned $25,000to a brother, Al, to start a business. Al reported only $220 ofdividends and interest for the year.The computed imputed interest amount for 2021 is $________.
d. On September 30, Ridge loaned $150,000to her mother, Joan, so that Joan could pay the entrance fee at aretirement home. Joan’s only receipts for the year were $9,000 inSocial Security benefits and $500 interest income received.The computed imputed interest amount for 2021 is $________.However, the imputed interest rules apply, and the interest isnot limited. The imputed interest rules do not apply. The imputedinterest is limited to an amount equal to his mother's netinvestment income. The imputed interest is limited to an amountequal to Ridge's net investment income. The imputed interest rulesapply, and the interest is not limited. This is because the loanexceeded $_____.
If an amount is zero, enter "0".
Question Content Area
a. On June 30, Ridge loaned $12,000 to acousin, Jim, to buy a used truck. Jim's only source of income washis wages on various construction jobs during the year. Thecomputed imputed interest amount for 2021 is $_____.However, the imputed interest is not limited. The imputedinterest rules do not apply. The imputed interest is limited to anamount equal to Jim's net investment income. The imputed interestis limited to an amount equal to Ridge's net investment income. Theimputed interest rules do not apply. This is because the loan wasless than $______ and Jim does not have anyinvestment income.
c. On September 1, Ridge loaned $25,000to a brother, Al, to start a business. Al reported only $220 ofdividends and interest for the year.The computed imputed interest amount for 2021 is $________.
d. On September 30, Ridge loaned $150,000to her mother, Joan, so that Joan could pay the entrance fee at aretirement home. Joan’s only receipts for the year were $9,000 inSocial Security benefits and $500 interest income received.The computed imputed interest amount for 2021 is $________.However, the imputed interest rules apply, and the interest isnot limited. The imputed interest rules do not apply. The imputedinterest is limited to an amount equal to his mother's netinvestment income. The imputed interest is limited to an amountequal to Ridge's net investment income. The imputed interest rulesapply, and the interest is not limited. This is because the loanexceeded $_____.