Which of the Following Never Generate Taxable Income

question 22

Multiple Choice

Which of the following never generate taxable income?
I.Interest free loan from family member.
II.Interest free loan from employer.
III.Interest free loan under $10,000.
IV.Interest free loan over $100,000.
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• A)Only statement I is correct.
• B)Only statements I and III are correct.
• C)Only statements I and II and III are correct.
• D)Only statement III is correct.
• E)Only statements II and III are correct.

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Definitions:

Financing Activities

Transactions related to raising capital and repaying investors, including issuing debt, selling stock, or paying dividends.

Cash Dividends

Payments made by a corporation to its shareholder members from its earnings or reserves.

Net Cash

The amount of cash a company has on hand after all debts and liabilities have been paid.

Investing Activities

Financial actions related to the acquisition and disposal of long-term assets and other investments not considered as cash equivalents.