Your grandparents have graciously offered vou an interest-free loan to help you start your adult life. What are the tax implications of the following scenarios? Assume the Federal interest rate is 3.5% and all loans are made on 1/1.

a) They offer $250,000 to be repaid in five years. You use this to purchase a car, put a down payment on a home, and pay off student loans.

b) They offer $80,000 to be repaid in five years. You use this money to place a

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downpayment on a house to be used as your primary residence.

c) They offer $80,000 to be repaid in five years. You use this money to purchase a rental property that generates you $30,000/year in rental income.

Your grandparents have graciously offered you an interest-free loan to help you start your adult life. What are the tax implications of the following scenarios? Assume the Federal interest rate is 3.5% and all loans are made on 1/1. a) They offer $250,000 to be repaid in five years. You use this to purchase a car, put a down payment on a home, and pay off student loans. - Not below excemet ion of lo0,000 j mest (s) imprid 2{0,00:0.035=8,750 will be ricognized interist income from gran and intivist upense b) They offer $80,000 to be repaid in five years. You use this money to place a downpayment on a house to be used as your primary residence. Qxemet, below dlook c) They offer $80,000 to be repaid in five years. You use this money to purchase a rental property that generates you $30,000/ year in rental income