Relevant federal rate on interest


On January 1, Father (Dave) loaned Daughter (Debra) $100000 to purchase a new car. There were no other loans outstanding between Dave and Debra. the relevant federal rate on interest was 6 percent. the loan was outstanding for the entire year.

a. if debra has 15000 of inveestment income, dave must recognize 6090 of imputed interest income.

b. dave must recognize 6090 of imputed interest income regardless of the amount of debra's investment income.

c. debra must recognize 6090 of imputed interest income.

d. debra must recognize 6090 of imputed interest income if dave has at least 6090 of investment income.

e. none of the above.

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Accounting Basics: Relevant federal rate on interest
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