@Hendrix wrote:
As long as I don't have to pay extra tax as a borrower, I am fine. Thank you.
Imputed Interest on Below Market Loans | Individual Income Tax | Episode 20 - YouTube
It is mentioned at around 10:00. I've seen a couple different videos mentioning the same thing.
I might have seen that the difference between my 1% and AFR is considered as income for the borrower? Maybe I am totally mistaken.
No, the lender must report the interest as income (using the AFR) even if they don't charge interest. The borrower does not have income from interest not charged.
I haven't watched the video, but it certainly could be wrong.
