Question 5 Elizabeth makes the following interest-free loans during the year. The relevant Federal interest rate is 5%, and none of the loans are motivated by tax avoidance. All of the loans were outstanding for the last six months of the tax year. Identify the Federal income tax effects of these loans by computing Elizabeth's gross income from each loan by computing Elizabeth's gross income from each loan. Borrower's Net Borrower Amount Investment Income Purpose of Loan Richard $5,000 $800 Gift Woody $8,000 $600 Stock purchase Irene $105,000 $0 Purchase principal residence What are the effects of the imputed interest rules on these transactions? Compute Elizabeth's gross income from each loan.