Tax: Is Fred Peters payment a tax deduction?
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In the current year, Fred Peters paid $10,000 of the business interest expense on a loan made to his son Jack, age 30, during the year. Jack was planning to file for bankruptcy and avoid making the interest payment, but Fred made the payment in order to avoid embarrassment for the family. Can Fred claim a business interest expense deduction on his individual income tax return for the payment of his son Jack's business interest expense?
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Solution Summary
The solution explains the tax treatment for Fred after making a payment on son Jack's loan. It also discusses certain situations where the answer might vary, given more facts. The explanation is given in 232 words.
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Problem: In the current year, Fred Peters paid $10,000 of the business interest expense on a loan made to his son Jack, age 30, during the year. Jack was planning to file for bankruptcy and avoid making the interest payment, but Fred made the payment in order to avoid embarrassment for the family. Can Fred claim a ...
Purchase this Solution
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