Which of the following interest-free loans is subject to the imputed interest rules (i.
Which of the following interest-free loans is subject to the imputed interest rules (i.e., interest must be imputed on the loan)?I.Marilyn loans $24,000 to her grandmother and she uses the money to pay personal expenses and take a vacation.Her grandmother's sole income is from Social Security.II.Pineview Corporation loans $20,000 to Catherine, an employee.Catherine uses the proceeds as a down payment on a house.Catherine's net investment income for the year is $ 300.III.Scott loans $65,000 to his son.His son uses the money to open a new business.During the current year, the business shows a loss and his son has no other sources of income.IV.Alaric Corporation loans $27,000 to its principal shareholder.The shareholder uses the funds to buy additional shares of stock in Alaric.The shareholder is deemed to receive $8,500 of dividends from Alaric during the year.()
:A.Only statement II is correct
B.Only statements I and III are correct
C.Only statements II and IV are correct
D.Only statements I and IV are correct
E.Only statements II and III are correct.