Brad is the president of the Yellow Corporation. He and other members of his family control the corporation. Brad has a temporary need for $50,000, and the corporation has excess cash.
He could borrow the money from the bank at 9%, and yellow is earning 6% on its temporary investments. Yellow has made loans to other employees on several occasions. therefore, brad is considering borrowing $50,000 from the corporations. He will repay the loan principal in two years plus interest at 5%. identify the relevent tax issues for Brad and the Yellow Corporation