Robin Corporation is owned as follows: Isabelle.................................................26% Peter, Isabelles husband...................19% Sonya, Isabelles mother....................15% Reggie, Isabelles father......................25% Quinn,

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Robin Corporation is owned as follows: 

Isabelle.................................................26% 

Peter, Isabelle’s husband...................19% 

Sonya, Isabelle’s mother....................15% 

Reggie, Isabelle’s father......................25% 

Quinn, an unrelated party.................15% 

Robin is on the accrual basis, and Isabelle and Peter are on the cash basis. Isabelle and Peter each loaned Robin Corporation $40,000 out of their separate funds. On December 31, 2019, Robin accrued interest at 7% on both loans. The interest was paid on February 4, 2020. What is the tax treatment of this interest expense/income to Isabelle, Peter, and Robin?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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South-Western Federal Taxation 2020 Essentials Of Taxation Individuals And Business Entities

ISBN: 9780357109175

23rd Edition

Authors: Annette Nellen, James C. Young, William A. Raabe, David M. Maloney

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