Wednesday, January 15, 2014

What is a forgivable loan?

What is a forgivable loan?
A forgivable loan is a monetary incentive used in the securities business to lure a financial advisor from one firm to another.For example, a securities company gives you a loan of $100,000 - forgivable in four years in equal amount of $25,000 - if you move your book of business to them. You are taxed on the imputed interest each year on the forgiven $25,000. At the end of four years your loan is completely forgiven by the firm.

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