Exercise 4-24 (Algorithmic) (LO. 4) Elizabeth made the following interest-free loans during the year. Assume that tax avoidance is not a principal purpose of any of the loans. Assume that the relevant Federal rate is 5% and that the loans were outstanding for the last six months of the year. Borrower's Net Investment Income Borrower Amount Purpose of Loan Richard $6,250 $0 Gift Woody $100 Purchase stock $7,500 $167,000 Irene $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 "O". If required, round your final answer to the nearest dollar. a. apply. Elizabeth's Richard is not subject to the imputed interest rules because the $10,000 gift loan exception does gross income from the loan is $ 4,175 X 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 . Elizabeth's gross income from the loan is $ 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 $ 4,279 X