What amount of gross income does wally recognize this year

Assignment Help Taxation

Reference no: EM13905860

Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $20,000 at the beginning of the year at a simple interest rate of 1 percent. Wally would have paid interest of $2,400 this year if the interest rate on the loan had been set at the prevailing federal interest rate.

a) Wally used the funds as a down payment on a speedboat and repaid the $20,000 loan (including $200 of interest) at year-end. Does this loan result in any income to either party, and if so, how much?

b) Assume instead that Pay More forgave the loan and interest on December 31. What amount of gross income does Wally recognize this year? Explain.

Reference no: EM13905860

Questions Cloud

Benefits of evaluating and monitoring staff members : Describe the different ways you might gather information about a staff member's workplace performance and what are the benefits of evaluating and monitoring staff members on a continuous basis?

Who presents with gradual onset of dyspnea on exertion : Tom is a 47 year old male who presents with gradual onset of dyspnea on exertion and fatigue. He also complains of frequent dyspepsia with nausea and occasional epigastric pain. So far you only know that he has a history of alcohol abuse.

What amount if any of the premium amuck paid on his behalf : What amount, if any, of the premium AMUCK paid on his behalf, must Grady include in his gross income for the year? Provide a tax authority to support your answer.

Windmire company manufactures and sells to local wholesalers : A new out of state distributor has offered to buy 50,000 units next month for $ 3.44 each.

What amount of gross income does wally recognize this year : Assume instead that Pay More forgave the loan and interest on December 31. What amount of gross income does Wally recognize this year? Explain.

Show how we may determine the state vector : Consider a pure ensemble of a spin 1/2 system. Suppose , and the sign of are known. Show how we may determine the state vector. Why is it unnecessary to know the magnitude of ?

Key elements of the professional judgment framework : Write a summary of the key elements of the professional judgment framework presented in this module. Search again the American Institute of Certified Public Accountants (AICPA) Web site at www.aicpa.org to locate a disciplinary action

Compare and contrast positive and negative feedback loops : Compare and contrast positive and negative feedback loops. Give an example of each and how common each is in natural systems.

The arctic national wildlife refuge : The Arctic National Wildlife Refuge (ANWR) has oil and gas reserves. Drilling for these has been a national debate in recent years. Discuss the political, economic, and environmental concerns behind this debate.

User Account

All Pages