2 George transfers Cash of $150,000 to Finch Corporation, a newly formed corporation, for 100%...
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Accounting
2 George transfers Cash of $150,000 to Finch Corporation, a newly formed corporation, for 100% of the stock in Finch worth $60,000 and debt in the amount of $70,000, payable in equal annual installments of $7,000 plus interest at the rate of 9% per annum. In the first year of operation, Finch has net taxable income of $40,000. If Finch pays George interest of $5,300 and $7,000 principal payment on the note: a. George has dividend Income of $7,000. b. Finch Corporation has an interest expense deduction of $5,300. c. George has dividend income of $13,300. d. Finch Corporation does not have a tax deduction with respect to the payment. e. None of these choices are correct. TTTTTTTTTTTTT
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