it would be a gift, if there's no requirement to pay you back. an intra family loan over $10,000 could fall under IRC code section 7872. this could pose problems under its imputed interest rules. The amount you gave her is not deductible by you regardless of loan or gift. She may be entitled to a deduction depending on what the money is spent on. there are various rules concerning deductibility and since this is her first business consulting with a tax pro to go over the dos and don'ts is advisable also, income tax and other reporting obligations, possibly sales tax.
