Sadly both you and the other person "should" each file a gift tax return for the gifts you each gave each other. But was it really a gift ? Repayment would indicate it was really a loan (even if it was interest free) and not a gift.
This sounds a bit dodgy. A gift must be freely made, without strings or repayment requirements and without conditions. We need to think about what really happened.
Maybe you made a gift, but the person refused to accept it and returned the money. No gift tax returns would be required since the gift was never completed.
Maybe you made a real gift with no strings and no expectation of repayment, and the recipient later for some reason made you a gift with no obligation to do so. Then you each made a gift and must each report the gift on form 709. (Gift tax is not owed unless your lifetime gifts are more than $11 million, but you must file the return so the IRS can keep track of your large gifts.)
Or maybe you made a loan with expectation of repayment, but called it a gift to disguise the purpose for some reason. In that case, you don't file gift tax returns. But, the lender must report taxable interest income that they could have charged if it was an official loan, even if no interest was charged or paid. This is called imputed interest, and the lender must report taxable interest income using the IRS minimum rate, even if no interest was charged.
The minimum IRS interest rate is called the Applicable Federal Rate (AFR) which is variable and changes monthly.
Last year, the AFR was as low as 0.2% in some months, it is currently 2.2%. Suppose you made a 6 month loan of $50,000 in September 2021. The AFR for short-term loans was 0.17%. For a 6 month loan that works out to $42.50 of interest you could have charged, and must be reported as taxable income on your tax return even if you didn't charge interest. If you did charge interest, you must report the amount you actually received, of course, but not less than the minimum amount using the AFR.
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