Elizabeth makes the following interest$-$free loans during the year. Assume that tax avoidance is not a principal purpose of any of the loans.

The relevant Federal rate is $5\%$ and that the loans were outstanding for the last six months of the year.

By how much do each of these loans increase Elizabeth's gross income?

If an amount is zero, enter $"0".$

a$.$ Richard $$ subject to the imputed interest rules because the $$10,000$ gift loan exception

$$ apply. Elizabeth's

gross income from the loan is $

b$.$ The $$10,000$ exception $,$: apply to the loan to Woody because the proceeds were used to purchase

c$.$ None of the exceptions apply $$ to the loan to Irene because the loan was for more than $$100,000.$ Elizabeth's

gross income from the loan is $Question $5$ Elizabeth makes the following interest$-$free loans during the year. The relevant Federal interest rate is $5\%,$ and none of the loans are motivated by tax avoidance. All of the loans were outstanding for the last six months of the tax year. Identify the Federal income tax effects of these loans by computing Elizabeth's gross income from each loan by computing Elizabeth's gross income from each loan. Borrower's Net Investment Income Purpose of Loan Borrower Amount Richard $$5,000$ $$800$ Gift Woody $$8,000$ $$600$ Stock purchase Irene $$105,000$ $$0$ Purchase principal residence What are the effects of the imputed interest rules on these transactions? Compute Elizabeth's gross income from each loan.