topic Loans From Family Members in Investors & landlords

Loans From Family Members

Craigcorneau — Mon, 23 Feb 2026 12:38:40 GMT

My mother leant me and my wife $38,200 in November to help us pay off our high interest credit cards then pay her back monthly. We haven’t started the regular payments yet and I wonder what tax rules, if any apply to our situation for me and my wife and my mother. I don’t want to end up with a surprise audit. Do either of us need to claim the loan money given or received on our taxes? I don’t know how that works.

Re: Loans From Family Members

Bsch4477 — Mon, 13 Feb 2023 19:43:06 GMT

The answer to your question depends on how the loan was structured including what if any interest is paid and at what rate. This article might help.

https://www.lbmc.com/blog/tax-effects-of-interest-free-family-loans/

Re: Loans From Family Members

MonikaK1 — Mon, 13 Feb 2023 19:48:34 GMT

Loan proceeds aren't taxable when you receive them. If you borrow money from a bank or other institution and don't pay it back, you could receive a Form 1099-C for Cancellation of Debt income.

When you pay back a loan with interest, the receiver reports the interest income.

Payment of interest is only deductible if it's for a loan secured by your personal residence, or for business purposes.

See this article for more information on the deductibility of interest.

Re: Loans From Family Members

Opus 17 — Mon, 13 Feb 2023 20:00:49 GMT

Duplicate.

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/family-loans/01/2880730#M96241