On January 1, Wilton loans Andy $90,000. The loan is to be repaid in 5 years with no interest charged. The applicable federal rate is 5%. Discuss the treatment of the loan for both Wilton and Andy in each of the following independent situations:
a. Andy is Wilton's son, and he uses the loan to purchase a new home. Andy has investment income of $600 during the year.
b. Andy is Wilton's son, and he uses the loan to purchase investment property. Andy's net income from all investments for the year is $1,800.
c. Assume the same facts as in part b, except that Andy is an employee of Wilton's.
d. Assume the same facts as in part b, except that Andy is a shareholder in Wilton's corporation, which makes the loan to Andy.