Imputed interest rules apply to term loans or demand loans in which the interest rate is less than the Applicable Federal Rate (AFR). Which of the following transactions does not fall under these rules? Assume in all situations that interest is below the AFR.

a) Gift loans of $14,000 in which interest foregone is in the form of a gift.

b) Loans in which a principal purpose is to avoid tax.

c) Loans in which the below-market or interest-free loan would have a significant effect on the tax liability of the borrower or lender.

d) Both Gift loans of $14,000 in which interest foregone is in the form of a gift and Loans in which a principal purpose is to avoid tax.