Emily Made the Following Interest Free Loans to Her Children

question 76

Essay

Emily made the following interest free loans to her children:
(1)$10,000 to Erin for a down payment on a new home.Her net investment income for the year is $1,300.
(2)$50,000 to Sasha to purchase stock.Her net investment income for the year is $800.
(3)$60,000 to Tim to purchase a new boat.His net investment income for the year is $2,800.
The applicable federal interest rate on similar loans is 5%.What is the amount of interest income that Emily must report from these transactions?

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