Business, 10.03.2020 08:21 cs101200

Tonya contributes $150,000 to Swan, Inc., for 80% of the stock. In addition, she loans Swan $600,000. The maturity date on the loan is five years and the interest rate is 3%, the same as the Federal rate. Which of the following statements are correct?a. If the loan is not reclassified as equity, Swan can deduct interest expense annually of $18,000, and Tonya includes in gross income annually interest income of $18,000.
b. If the loan is reclassified as equity, Swan claims no interest deduction, and Tonya recognizes no income.
c. If the loan is reclassified as equity, Swan qualifies for a deduction of $600,000 when the loan is repaid, and Tonya receives dividend income of $600,000 (assuming that Swan's earnings and profits are at least $600,000).
d. Only "If the loan is reclassified as equity, Swan qualifies for a deduction of $600,000 when the loan is repaid, and Tonya receives dividend income of $600,000 (assuming that Swan's earnings and profits are at least $600,000)" and "If the loan is not reclassified as equity, Swan can deduct interest expense annually of $18,000, and Tonya includes in gross income annually interest income of $18,000".
e. "If the loan is reclassified as equity, Swan qualifies for a deduction of $600,000 when the loan is repaid, and Tonya receives dividend income of $600,000 (assuming that Swan's earnings and profits are at least $600,000)", "If the loan is notreclassified as equity, Swan can deduct interest expense annually of $18,000, and Tonya includes in gross income annually interest income of $18,000", and "If the loan is reclassified as equity, Swan claims no interest deduction, and Tonya recognizes no income".

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 11:20

Which stage of group development involves members introducing themselves to each other?

Answers: 3

Answer

Business, 22.06.2019 21:20

In a market economy, supply and demand are important because theya. (i) play a critical role in the allocation of the economy's scarce resources.b. (ii) determine how much of each good gets produced.c. (iii) can be used to predict the impact on the economy of various events and policies.d. all of (i), (ii), and (iii) are correct.

Answers: 3

Answer

Business, 22.06.2019 23:30

Part 1: interview at least three different people you know that fall within three age ranges (25-35), (36-50), and (51-70) year of age. ask each person you interview if they have life insurance (term, whole life etc.) and health insurance. ask what factors influenced their decision to buy or not the insurance coverage? report your findings to this assignment. specify who the people were that you spoke with.\

Answers: 3

Answer

Business, 23.06.2019 01:00

Bob, an employee at machina corp., is well known among his colleagues because of his temper and impatience. during a heated argument with one of his supervisors, he reacts with hostility. bob's manager calls him in for a discussion and listens to what he has to say about the incident, while treating him with dignity and respect. this scenario can be best categorized as one that used

Answers: 3

Answer

You know the right answer?

Tonya contributes $150,000 to Swan, Inc., for 80% of the stock. In addition, she loans Swan $600,000...

Questions