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2. Assume the federal rate is 4%. Explain the tax implications for both the lender and the borrower in the following situations. Show computation if any. (1) On January 1, Martin loans $10,000 to his son Billy No interest is imputed for the loan is a gift loan, between father and son and is below the maximum of $10,000. This loan has no implications for either the lender pr the borrower have no tax implications to face in this loan. (2) On January 1, Martin loans $80,000 to his daughter Margaret. Margaret's investment income is $800. No interest is imputed because the loan is a gift loan below $100,000 and Margaret's net investment income is less than $1,000 limit needed to impute interest. This transaction will have zero effect on either the lender or the borrower's taxes. (3) On January 1, Martin loans $90,000 to his other daughter Sue Ellen. Sue Ellen has interest income of $2,000. The loan is a gift loan; however, interest must be imputed because the loan is greater than $10,000 and Sue Ellen has an interest income of greater than $1,000. Martin must recognize interest income of $3,600 = 4% of $90,000) Likewise, Sue Ellen must recognize an interest expense of $3,600 (4) On January 1 of the following year, Martin loans his daughter Sue Ellen (who he had already loaned $90,000) an additional $20,000. The loans (5) Zion Corporation loaned its sole shareholder Robert, $15,000. The loan is a corporation-to-shareholder loan and is dividend income for Robert. Due to the loan being over $10,000, interest expense must be recorded on the $15,000 dividend. This expense is $600 (15,000 X. 04) for Robert and the