You do not need to claim anything on your tax returns; however, you mother will need to report interest received on her tax return. In a family loan, when there is no interest rate or a rate below the IRS-determined minimum rate, the interest that isn’t charged is assumed to be income to the parent from the child. In other words, there is imputed interest income or phantom income. Your mother should report interest income at the Applicable Federal Rate as income, even though no cash was received.
Your mother should charge, and you should pay an interest rate equal to the “applicable federal rate” (AFR). As long as you do that, the IRS will be satisfied and you won't have to worry about any tricky tax rules biting you. As the lender, your mother will report as taxable income the interest she receives.
You should send your mother a Form 1099-INT showing he amount of interest paid and/or accrued.
You can get AFR rates by going to the following IRS webpage: Applicable Federal Rates (AFRs).
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