In the United States, imputed interest is assessed against non-interest bearing financial instruments such as original discount bonds, strip bonds and zero-coupon bonds. These are purchased significantly below face value and mature at par. If a person is in a highertax bracket, it would be bene...
What is annual revenue? What is contra revenue? Define the word revenue What is the revenue recognition principle? What is a revenue growth strategy? What is imputed income? What is an income statement? What are income accounts? What is gross income?
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...
An applicable federal rate is an interest rate used in a few ways by the IRS. The most common use of this rate is to calculate...
Calculating payroll deductions is the process of converting gross pay to net pay. To do this:Adjust gross pay by withholding pre-tax contributions to health insurance, 401(k) retirement plans and other voluntary benefits. Refer to the employee’s Form W-4 and the IRS tax tables for that ...
What is the dividend tax credit?The Dividends Received Deduction:The Internal Revenue Service (IRS) grants corporations a special deduction designed to cover the dividends received from a corporation over which it has at least a partial ownership....
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Zero-coupon bonds are debt securities that are sold at a deep discount for a price far below their face value. This is because they don't make regular interest payments.
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...
If the lender charges interest at a lower rate than the proper AFR, the IRS may reassess the lender and addimputed interestto the income to reflect the AFR rather than the actual amount paid by the borrower. Also, if the loan is more than the annual gift tax exclusion, it may trigger ...