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mbrown3334
Level 1
Oct 27, 2021 3:42 PM UTC
Question

Loans

Hello, 

How is a loan calculated on taxes? Is it considered income and if it is how are the loan payments determined on the taxes? 

 

Thanks for reviewing this message. 

1 reply

Anonymous_
Level 15
Oct 27, 2021 3:49 PM UTC

A loan generally consists of two components; principal (the amount borrowed/loaned) and interest.

 

Giving or receiving a loan is not typically a taxable event, but the interest paid on the loan balance is typically taxable for the lender and, depending upon the purpose and nature of the loan, the interest may be deductible for income tax purposes by the borrower.

 

If you want a more detailed answer, you should post additional, and more specific, facts.

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