Ralph Borrowed $4 Million and Used the Proceeds in His

question 41

True/False

Ralph borrowed $4 million and used the proceeds in his internet business. The interest on this debt is not subject to an interest limitation if Ralph's business has average annual gross receipts of $25 million or less for the prior three taxable years.

---

Definitions:

Lottery

A form of gambling involving the drawing of numbers at random for a prize.

Earn

Earn refers to receiving money in exchange for work or services rendered, or through investment returns.

Interest Rate

The percentage of the principal amount charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage rate (APR).

Equivalent

Equal in value, amount, function, meaning, etc., to something else.