Family loan from foreign relative

[JAR75]

Hi Community,

My father is Spanish citizen and plans to help me buy a house in the US. He plans to loan me $80.000, which he intends to lend at no interest, if that is allowed. I am US permanent residency holder. As the borrower, do I need to report this to the IRS and if so, what form would I use? Would this be a case exempted from the 'imputed interest'? Thank you.

[SusanY1 · Accepted solution]

No, as the borrower, you don't have anything to report. 

We usually worry about "imputed interest" as it relates to income from the person lending the money, so I don't believe you need to worry about that. 

If the loan is forgiven, that would then be considered a gift.  Be aware that if you receive more than $100,000 in gifts from a foreign individual or trust that you have a reporting requirement (but not a tax due.)  Those gifts are reported on Form 3520.