Vito is the sole shareholder of vito inc he is also

Reference no: EM13596376

Vito is the sole shareholder of Vito, Inc. He is also employed by the corporation. On June 30, 2011, Vito borrowed $8,000 from Vito, Inc., and on July 1, 2012, he borrowed an additional $4,000. Both loans were due on demand. No interest was charge on the loans, and the Federal rate was 8% for all relevant dates. Vito used the money to purchase a boat, and he had $1,100 of investment income. Determine the tax consequences to Vito and Vito, Inc. in each of the following situations:
a) The loans are considered employer-employee loans
b) The loans are considered corporation-shareholder loans

Reference no: EM13596376

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