Imputed interest is a term used in tax law to describe a situation where a lender charges no interest on a loan, but the Internal Revenue Service (IRS) considers the loan to have been made at an interest rate that is "imputed" or implied by market conditions. This can happen when a l...
Lend someone money at zero interest, and you don't make any profit from the deal. Therefore, you might assume that the loan doesn't have any tax implications for you. In many cases, though, you'd be wrong. The tax code expects you to charge a certain amo
circumstances.In an audit,the IRS will calculate an interest rate,impute that to the transaction, and declare each year's imputed interest as additional income to the lender, on which the lender must pay income taxes, penalties, and interest. (The rules are found at 26 U.S.C. §1273,...
it might be beneficial for a seller to increase his sales price and offer a low interest rate so he may profit from a lower tax liability. To prevent this from happening, the IRS requires that an applicable federal rate (AFR) be applied to all loans of six or more month’s duration. ...
Sixty-four percent of Americans ages forty-five and above are “not at all familiar” with a lender’s obligation to report earned interest income from certain loans to others, even if no interest is paid, at a rate equal to the appropriate IRS Applicable Federal Rate in...
Interest-Free Loans: If an employer provides an employee with interest-free loans, the amount of the loan must be counted as imputed income to the employee. Unreported tips:If a worker does not report tips received from customers, the IRS may impute an amount of income based on the worker...
The W-4 is an Internal Revenue Service (IRS) document you fill out with your employer that allows a percentage of your income to be withheld for annual taxes. You claim the number of allowances you want the IRS to recognize based on factors you know abou
9 RegisterLog in Sign up with one click: Facebook Twitter Google Share on Facebook Imputed Dictionary Thesaurus Idioms Related to Imputed:imputed negligence Attributed vicariously. In the legal sense, the termimputedis used to describe an action, fact, or quality, the knowledge of which is charg...