We gave our son a student loan, do you report the interest income when he starts paying back the loan, or do you report the accrued interest each year?

[MichaelMc · Accepted solution]

Individual taxpayers are, by default, cash method taxpayers in the federal income tax system. While you should, for informational purposes, be accruing the interest earned on the loan, you will not report that interest for federal income tax purposes until you actually receive it, when your student begins making repayment.