Problem 4-51 (LO. 4) Vito is the sole shareholder of Vito, Inc. He is also employed by the corporation. On June 30, 2018, Vito borrowed $8,000 from Vito, Inc. and on July 1, 2019, he borrowed an additional $10,000. Both loans were due on demand. No interest was charged on the loans, and the Federal rate was 4% for all relevant dates, Vito used the money to purchase a boat, and he had $2,500 of investment income. Determine the tax consequences to Vito and Vito, Inc., in each of the following situations If an amount is zero, enter "O". If required, round your intermediate computations to the nearest dollar and use these values in subsequent computations. Round your final answers to nearest dollar. a. The loans are considered employer-employee loans. 0 | In 2018, Vito has $ of compensation expense and interest income. of compensation income and interest expense , and Vito, Inc., has In 2019, the amount for Vito is 360,and the amount for Vito, Inc., is 360 Feedback Check My Work Imputed interest is calculated using the rate the Federal government pays on new borrowings and is compounded semiannually. This Federal rate is adjusted monthly and is published by the IRS. If interest is charged on the loan but is less than the Federal rate, the imputed interest is the difference between the amount that would have been charged at the Federal rate and the amount actually charged. b. The loans are considered corporation-shareholder loans. In 2018, Vito has $ 160 of dividend income and interest expense and Vito, Inc, has 160 of b. The loans are considered corporation-shareholder loans In 2018, Vito has dividends paid and interest income In 2019, the amount for Vito is 160 of dividend income and interest expense and Vito, Inc., has 160 of , and the amount for Vito, Inc., is 529