Hello TT community,
I need to send a sizeable amount of money as an interest-free loan to my sister's family (for tuition payments) in the UAE. This amount being sent is from my earnings/savings for which I have already paid taxes over the years. I will be receiving this amount back in small amounts over the next 5-6 years or a shorter period (don't know at the moment)
1. What are the tax implications for sending this interest-free loan to my family, that too to UAE?
2. What are the tax implications when I receive this amount back over the period mentioned despite already having paid taxes on this amount in the past?
3. Are there any other implications I am missing besides the above two?
thanks in advance
If the loan is more than $10,000 then you will have to enter imputed interest on it on your tax return each year. The IRS publishes a list of Applicable Federal Rates (AFR) each month, so you can use that to calculate the interest.
Here is a link with more information:
If the loan is more than $10,000 then you will have to enter imputed interest on it on your tax return each year. The IRS publishes a list of Applicable Federal Rates (AFR) each month, so you can use that to calculate the interest.
Here is a link with more information: