David borrowed $60,000 from his employer on March 01, 2020 at 2% interest and repaid $30,000 on October 01, 2020. David

used the loan proceeds to buy a Cottage. Assume the prescribed interest rates for 2020 are (3%,2%,4%,5%,) What is the taxable amount to David for this loan from his employer?

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Part 1

A.

$0, this is not a taxable benefit

B.

$625

C.

$525

D.

$575