Elaine loaned her brother, Mike, $175,000 to purchase a new home. Elaine does not charge Mike any interest on the loan. What are the tax consequences to Elaine and Mike?
Group of answer choices:
O Mike can deduct the interest that he is deemed to have paid Elaine.
O Elaine is treated as having made a gift of the forgone interest on the $175,000 loan to Mike.
O Elaine only has to impute interest on $75,000 of the loan to Mike.
O If Mike has no net investment income, Elaine does not have to treat the forgone interest as a gift.

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