Joshua loans his son, Seth, $100,000 interest free for five years. Seth uses the money for a

Question:

Joshua loans his son, Seth, $100,000 interest free for five years. Seth uses the money for a down payment on his home. Assume that the applicable federal rate of interest is 4 percent.
a. What are the tax consequences of this loan to Joshua and to Seth?
b. How would your answer change if Seth uses the money to invest in corporate bonds paying 8 percent annual interest?