The Purpose of the Tax Rules That Apply to Below-Market

question 30

Multiple Choice

The purpose of the tax rules that apply to below-market loans between family members is to:

• A)Discourage loans between related parties.
• B)Prevent shifting of income among family members.
• C)Prevent gifts from being disguised as bad debt expenses.
• D)Prevent gift tax avoidance.
• E)None of these is true.

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Definitions:

Franchiser

The company that sells a franchise.