Question

The purpose of the tax rules that apply to below-market loans between family members is to:a. Discourage loans between related parties.b. Prevent shifting of income among family members.c. Prevent gifts from being disguised as bad debt expenses.d. Prevent gift tax avoidance.e. None of these is true.

Answer 1

Answer:

b. Prevent shifting of income among family members

Explanation:

The recommended way to give money to family or particulars is by using the annual exclusion,which permits you to give $14,000 in cash each year to each of as many individuals as you want.