ACCT 485 Lecture Notes - Lecture 5: Interest Expense, Punitive Damages
20 Sep 2016
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Acct 485 lecture 5: rules for specific gross income items. Calculating using the rate the federal government pays on new borrowings and is compounded semiannually. Three types of below-market loans: gift loans, compensation-related loans. Effect on lender: interest income and gift made. Effect on borrower: interest expense and gift received. Exceptions and limitations: see flowchart printed. Effect on lender: interest income and compensation expense. Effect on borrower: interest expense and compensation income. Effect on lender: interest income and dividend paid. Effect on borrower: interest expense and dividend income. Exceptions and limitations: see flowchart printed (same as flowchart for compensation-related loans) Generally, a debtor who has debts discharged recognizes gross income equal to the amount of debt cancelled. If you go bankruptcy you don"t have to pay taxes on it: can keep horse, fire arm, wedding ring. A gift has been defined as a voluntary transfer of property by one to another without adequate [valuable] consideration therefrom [estate of d. r.
