At the time Karen left for college, her grandfather loaned her $100,000 to be used to pay for her college expenses.She signed a note stating that she would begin repaying the loan over 10 years beginning 6 months after graduation.There is no interest specified for the loan.Which of the following is true?
A) The grandfather has interest income on the loan.
B) The grandfather has made a gift of $100,000 to Karen at the time of the loan.
C) Karen can deduct interest expense on the loan
D) Karen owes gift taxes in the year of the loan
Correct Answer:
Verified
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