Interest-Free or Below-Market Loans

question 61

Multiple Choice

Interest-free or below-market loans

• A)must always have interest imputed on them.
• B)may result in treating the borrower as paying interest.
• C)result in treating the entire loan proceeds as a gift.
• D)will always result in at least $1,000 of interest income being imputed.

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Definitions:

Negligence

A lack of exercising the level of caution that a reasonably careful person would have shown in similar circumstances, leading to injury or damage.

Protected Individuals

Persons who are afforded special protections under the law, often due to their status, such as minors, disabled persons, or protected witnesses.

Restatement View

A perspective or doctrine derived from the Restatements of the Law, legal publications that seek to distill the common law into a series of principles or rules.

Tort Liability

Legal responsibility for damages caused by a wrongful act or omission other than breach of contract.