Exercise 4-24 (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 Purpose of Loan Borrower Amount Richard Woody Irene $5,000 $8,000 $105,000 $800 Gift $600 Purchase stock $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". a. Richard is not subject to the imputed interest rules because the $10,000 gift loan exception does gross income from the loan is $ apply. Elizabeth's b. The $10,000 exception does not income producing apply to the loan to Woody because the proceeds were used to purchase 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 gross income from the loan is $ to the loan to Irene because the loan was for more than $100,000 2,625 . . Elizabeth's