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On January 1, Year 1, Marge made a $60,000 interest-free loan to her son, Steve, who used the money to start a new business. Steves
On January 1, Year 1, Marge made a $60,000 interest-free loan to her son, Steve, who used the money to start a new business. Steves only sources of income were $50,000 ordinary income from the business and $1,200 of net investment income from a corporate dividend. The relevant federal interest rate was 5%.
What is taxable interest (if any) of this interest-free loan?
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