LO.10 Elizabeth makes the following interest-free loans during the year. The rel- evant 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. Borrower's Other Net Borrower Amount Investment Income Purpose of Loan Richard Woody Irene $ 5,000 8,000 105,000 $800 600 Gift Stock purchase 0 Purchase principal residence