In the case of a below-market loan between family members,if the imputed interest rules apply:

Question

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I is false because imputed interest rules only apply if the amount of the loan exceeds $10,000. 
II is true because the imputed interest rules require the lender to report interest as income, even if no actual interest payments are made. 
III is true because the borrower may be able to deduct the imputed interest as if it were paid to the lender. 
IV is true because if the loan is not repaid, the lender may be subject to gift tax on the imputed interest.

In the Case of a Below-Market Loan Between Family Members,if