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2. On January 1, 2019, P, a calendar year taxpayer makes an interest free $200,000 loan...

2. On January 1, 2019, P, a calendar year taxpayer makes an interest free $200,000 loan to his son, S, a calendar year taxpayer due in 5 years.

On January 1, 2019, the Federal mid-term rate is 2.45% compounded annually.

Discuss the tax implications of this transaction.

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