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I made a loan to an associate for his business. Is the interest on this loan considered capital gains or investment income? How would it be taxed?

 
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I made a loan to an associate for his business. Is the interest on this loan considered capital gains or investment income? How would it be taxed?

See https://www.irs.gov/taxtopics/tc403

 

Taxed as ordinary income not subject to self-employment tax (unless you are in the business of making loans).

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I made a loan to an associate for his business. Is the interest on this loan considered capital gains or investment income? How would it be taxed?

See https://www.irs.gov/taxtopics/tc403

 

Taxed as ordinary income not subject to self-employment tax (unless you are in the business of making loans).

I made a loan to an associate for his business. Is the interest on this loan considered capital gains or investment income? How would it be taxed?

Thanks for the quick reply.   

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