Does the IRS allow companies to deduct imputed interest expense received by an employee as taxable income?
The IRS taxes imputed interest received by employees. Does IRS allow the company that provides the benefit, a deduction for the imputed interest, and lower the company's taxable income? What law guides this?
Public Comments
- You may be referring to IRC ยง 7872, which taxes employees who receive loans from their employers at below-market interest rates. In such cases, the employee is taxed on the difference between the amount of the loan and the present value of the total payments due. The employer is allowed an equivalent deduction.
