On January $1,$ Year $1,$ Marge made a $$60,000$ interest$-$free loan to her son, Steve, who

used the money to start a new business. Steve's only sources of income were $$50,000$

ordinary income from the business and $$1,200$ of net investment income from a corporate

dividend. The relevant federal interest rate was $5\%.$

$($a$)$ What is taxable interest $($if any$)$ of this interest$-$free loan? $(5$ pts$)$

$($b$)$ What is the net effect of the taxable interest $($if any$)$ of the interest$-$free loan on the

Year $1$ taxable income of Marge. $(5$ pts$)$

$($c$)$ What is the net effect of the taxable interest $($if any$)$ of the interest$-$free loan on the

Year $1$s taxable income of Steve. $(5$ pts$)$