____ 25. Sharon made a $60,000 interest-free loan to her son, Todd, who used the money to start a new business. Todds only sources of income were $25,000 from the business and $490 of interest on his checking account. The relevant Federal interest rate was 5%. Based on the above information:

a.	Todds business net profit will be reduced by $3,000 (.05 $60,000) of interest expense.
b.	Sharon must recognize $3,000 (.05 $60,000) of imputed interest income on the below- market loan.
c.	Todds gross income must be increased by the $3,000 (.05 $60,000) imputed interest income on the below market loan.
d.	Sharon does not recognize any imputed interest income and Todd does not recognize any imputed interest expense.
e.	None of the above is correct.

Instructions : Please provide 2-3 sentence brief explanation and choose the best multiple choice answer. All sources must be noted. SHOW ALL WORK.