It's actually a large lone so I can pay off my bills, I will have to pay it back, but how do I put all this money in my acct. without the IRS snooping arould?
2006-10-13 08:38:20 · 11 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
Loans are not gifts.
I assume both you and the borrower are US persons.
The IRS, if they audit either you or the lender, may deem this to be a gift. You should document the loan with a loan note signed by both you and the lender. The note must contain the following:
1) name & address of borrower and lender.
2) amount being lent.
3) payment terms: when is it due, how many payments will be made, amounts of payments, and most importantly the interest rate.
If no interest rate is included with the loan, the IRS will impute a rate, which will be taxable income to the lender whenever you make a payment. You should therefore include a rate of interest indexed to the Federal base rate at the time the loan was made.
2006-10-13 21:33:57 · answer #1 · answered by lizzit 3 · 1⤊ 0⤋
Neither you nor the giver has to pay tax on the loan, although if you're paying interest, the person who loans you the money is supposed to pay taxes on the interest.
If it's a gift, then the giver, not the recipient, might have to pay tax if the gift is over $11,000 in a single year. But since it's a loan, no taxes are due.
2006-10-14 00:34:42 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
If it is a loan you have no tax implications. In 2006 you can be gifted up to 12,000 dollars and there is no tax on it. If it is a loan then it is not a gift. You simply deposit the check in your account and pay off your bills. Keep written record of all that you do.
2006-10-14 12:08:03 · answer #3 · answered by acmeraven 7 · 0⤊ 0⤋
Put the LOAN in writing -- as in a promissary note. The document needs to state that you are legally obligated to pay the money back and when payments are due. Sign it and have your family member sign it. If the IRS ever asks where the money came from you can give them a copy of the promissary note and they'll leave you alone.
2006-10-13 15:48:15 · answer #4 · answered by CPAKeith 3 · 2⤊ 0⤋
For 2006 the exclusion amount is $12,000. You can receive $12,000 from your parents as a gift without gift tax consequences.
If you structure it as a legit loan it may not be characterized as a gift. However, it would have to include the same terms and interest that would exist between unrelated parties.
2006-10-13 22:53:52 · answer #5 · answered by lennox525 2 · 0⤊ 0⤋
I put in $16,000 once from my parents and they never questioned it. This is a loan and being paid back also so don't worry about it IRS can't tax a loan checking accounts don't k now if you got it through a loan office or somewhere else. Unless your putting it in CD's earning income from it that's what they report to IRS.
2006-10-13 15:49:26 · answer #6 · answered by Carol 3 · 0⤊ 1⤋
You can receive up to $11,000 per year as a gift from a family member tax-free.
I would suggest going to the IRS website www.irs.gov or calling them to confirm though. Tax rules change/add daily and it is very difficult to keep up with them all!
2006-10-13 15:47:25 · answer #7 · answered by Goose&Tonic 6 · 1⤊ 1⤋
A loan is not income, it's a liability.
You do not have to pay taxes on a loan.
2006-10-13 16:01:17 · answer #8 · answered by lepninja 5 · 0⤊ 0⤋
Barry, quit answering tax questions, your a doof.
2006-10-13 17:00:48 · answer #9 · answered by RamsGod 3 · 0⤊ 1⤋
$499. You have to report any income/gifts that are more than $500 dollars.
2006-10-13 15:45:59 · answer #10 · answered by BoyBlu19 2 · 0⤊ 4⤋