Sheldon Corporation loans $150,000 interest free for one year to Lynn, a shareholder. Assume that...
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Sheldon Corporation loans $150,000 interest free for one year to Lynn, a shareholder. Assume that the applicable federal interest rate is 10%. Lynn uses the loan to pay for personal debts. How much gross income must Lynn recognize and how much can Sheldon Corporation deduct? Question 6 options: 1) Lynn recognizes $0 Sheldon Corporation deducts $0 2) Lynn recognizes $0 Sheldon Corporation deducts $15,000 3) Lynn recognizes $15,000 Sheldon Corporation deducts $0 4) Lynn recognizes $15,000 Sheldon Corporation deducts $15,000
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