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Debtor Creditor Relationships Article Review

Debtor Creditor Relationships Article Review

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Title: Debtor Creditor Relationships Article Review

Essay Details:

Subject: Business

Author: Mandy H

Date: July 24, 2016

Level: University

Grade: A

Length: 2 / 396

Essay text:

The loans were considered by the IRS to be gifts, while the intent by the mother was that only the forgone interest was meant to be a gift. Both sons signed a non-interest bearing demand note with no collateral and a stated maturity date. The legal argument was whether or not this was a bona fide creditor-debtor relationship with a real expectation for repayment and an intention to enforce the debt. In order to be considered a creditor-debtor relationship, certain criteria apply. These criteria include a promissory note being signed, interest charged, security or collateral, a fixed maturity date, demand for repayment made, actual repayment made, ability to pay and being reported for Federal tax purposes as a loan...

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