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After you file
There is nothing to report in Turbotax or to the IRS. The best way to protect yourself from the IRS claiming it was a gift is to prepare a formal note with repayment terms and at least market rate interest.
Failure to charge interest allows the IRS to use code section 7872 to impute interest and then hit you with taxes, penalties and interest for failure to report.
U.S. Code § 7872 - Treatment of loans with below-market interest rates
https://www.law.cornell.edu/uscode/text/26/7872
December 18, 2024
12:15 PM