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Betty and Tom are married. Betty has a MTR of 42% and Tom has a MTR of 24%. Betty lends Tom $50000 for him to

Betty and Tom are married. Betty has a MTR of 42% and Tom has a MTR of 24%. Betty lends Tom $50000 for him to invest. The loan has a prescribed rate of 1%. Tom pays Betty $500 interest a year, Betty claims that interest as income. Tom deducts that interest he paid. Why? Does attribution rules apply

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