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. Borrower's Net Borrower Amount Investment Income Purpose of Loan Richard $3,500 $0 Gift Woody $4,200 $425 Purchase stock Irene $144,500 $0 Purchase residence What are the effects of the imputed interest rules on these transactions? Compute Elizabeth's gross income from each loan. If an amount is zero, enter "0". If required, round your final answer to the nearest dollar. a. Richard is not subject to the imputed interest rules because the $10,000 gift loan exception does apply. Elizabeth's gross income from the loan is s 0 b. The $10,000 exception does not apply to the loan to Woody because the proceeds were used to purchase income producing assets. Although the $100,000 exception applies to this loan, the amount of imputed interest is o Elizabeth's gross income from the loan is $ 0. S 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 S 3,612.5 X