Warda made a $90,000 interest-free loan to her son, Ibrahim, who used the money to buy

a certificate of deposit. Ibrahims only income for the year is his salary of $35,000 and $2,400 interest income on the certificate of deposit. The relevant Federal interest rate is 6%. The loan is outstanding

for the entire year (2019).

Required: 1) Based on the above information, what is the effect of the loan on Wardas

gross income for the year?

2)The facts are the same as above, except you discovered that Warda had made

an additional loan of $15,000 to Ibrahim in the previous year. Ibrahim used the

funds to pay his childs private school tuition. What are the effects of the loan

on Wardas gross income?