Reimbursements

[stmary53]

1. During the period between the date in 2022 when my 89-year-old father began assisted living and the date in 2022 when he sold his home, he accrued expenses that he could not pay. My sister and I picked up the tab for these expenses—roughly $17,000 for each of us. I kept meticulous records for the amounts I lent him. After the house sold, my father reimbursed us from the proceeds of the sale. The reimbursement amount is NOT income. Is there any reason to report this financial event when I prepare my own taxes for 2022?

[rferreira 1]

Your father is very fortunate to have such caring children!  You are correct, it is not taxable income to you.  However, the amounts that were paid can be claimed on your father's tax return if they were for qualified medical expenses on Schedule A.

[KristinaK]

No, no reason to report this financial event. You loaned money to your father and he paid it back (kudos to you for doing that). However, the interest earned must be reported on your tax return. 

The IRS requires that adequate interest is charged.  Read more about it here.

You probably want to use the applicable federal rate (AFR) to calculate what the adequate interest for the period should have been and include that on your return. You can find the rates here.