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Level 1

I wired $100,000 abroad to my parents to pay back my tuition I borrowed from them. How to do tax about this transfer?

I wired $100,000 abroad to my parents to pay back my tuition I borrowed from them. How to do tax about this transfer?

Another issue:

I select "gift" for the purpose of the transfer by mistake, because I did not find a option "repay loan".

1 Best answer

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Level 15

I wired $100,000 abroad to my parents to pay back my tuition I borrowed from them. How to do tax about this transfer?

The payment of a loan (or a gift even) is not taxable to the payer.  It doesn't go on your tax return in any way. 

 

You can't deduct any interest as student loan interest because the lender was a family member.

 

Any paperwork required for financial reporting of a large wire transfer will be done by the banks.   You don't need to do anything else. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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4 Replies
Employee Tax Expert

I wired $100,000 abroad to my parents to pay back my tuition I borrowed from them. How to do tax about this transfer?

This is a loan repayment.

 

There is no tax or reporting obligation for a loan repayment, even to a foreign person.

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Level 15

I wired $100,000 abroad to my parents to pay back my tuition I borrowed from them. How to do tax about this transfer?

The payment of a loan (or a gift even) is not taxable to the payer.  It doesn't go on your tax return in any way. 

 

You can't deduct any interest as student loan interest because the lender was a family member.

 

Any paperwork required for financial reporting of a large wire transfer will be done by the banks.   You don't need to do anything else. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

Level 1

I wired $100,000 abroad to my parents to pay back my tuition I borrowed from them. How to do tax about this transfer?

Thanks.

I know that a bank reports every transfer greater than 10,000 to IRS.  Do I need to have the bank change "gift" to "repay loan" ?

Level 15

I wired $100,000 abroad to my parents to pay back my tuition I borrowed from them. How to do tax about this transfer?


@jacksun210 wrote:

Thanks.

I know that a bank reports every transfer greater than 10,000 to IRS.  Do I need to have the bank change "gift" to "repay loan" ?


No.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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