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The Robin Corporation is owned as follows:
Isabelle 26%
Peter, Isabelle's husband 19%
Sonya, Isabelle's mother 15%
Reggie, Isabelle's father 25%
Quinn, an unrelated party 15%
Robin is on the accrual basis, and Isabelle and Peter are on the cash basis. Isabelle and Peter each loaned the Robin Corporation $40,000 out of their separate funds. On December 31, 2015, Robin accrued interest at 7% on both loans. The interest was paid on February 4, 2016. What is the tax treatment of this interest expense/income to Isabelle, Peter, and Robin?
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