If I loaned my parents small amounts of money over a few years, and then they pay it back in a large lump sum, can that lump sum be taxed?
02696
2 Replies
VolvoGirl
Level 15
Jun 7, 2019 3:29:07 PM
No, but the interest should be.
Anonymous
Not applicable
Jun 7, 2019 3:29:10 PM
in total how much was the lump sum. the reason is that the IRS has rules on "interest free" loans that could mean you have to report interest income even if not received. the code section is 7872.