If I don't pay any interest, there would be no tax implications on either side?
If I do pay interest, then my family will have to report interest income to IRS?
I look forward to hearing from you.
Thanks.
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@april4mar - yes, there are tax implications.
here is one article on the topic
here are the current IRS rates. Generally, the interest rate on the loan has to be in the 5% range to avoid tax issues.
https://www.irs.gov/pub/irs-drop/rr-22-22.pdf
See a lawyer.
The major tax implication of an interest-free loan of that size is what's called "imputed interest." This TurboTax help article explains:
https://turbotax.intuit.com/tax-tips/tax-payments/irs-tax-rules-for-imputed-interest/L7UbulHpC
Very educational. Thank you.
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