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GDK made interest free loans to his two brothers Harry and James of $30,000 and $150,000 respectively. Harry used his $30,000 loan to buy IBM

GDK made interest free loans to his two brothers Harry and James of $30,000 and $150,000 respectively. Harry used his $30,000 loan to buy IBM bonds and earned $1,500 in interest. James used the money and bought a residence.

Are Harry and James liable for imputed interest taking into account that imputed interest is attributed to amounts in excess of $10,000?

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