Parents lend $2,000,000 to their child to start a business. The loan is interest-free and is payable on demand. The imputed interest is subject to

A. The gift tax only in the year the parents lend the money.
B. The generation-skipping transfer tax, but not the gift tax.
C. The gift tax each year the loan is outstanding.
D. An excise tax.

Answer: C. The gift tax each year the loan is outstanding.