I'm looking to open a shop and my parents offered to lend me some money to help out. They are taking out a home equity loan to lend me about $35,000 to $55,000. I agreed to pay them back. Because they are taking out a loan do they have to pay any taxes? Do I have to pay taxes on this money?
I don't have any assets so I wouldn't be able to get a loan for the amounts of money I posted.
2007-11-24 11:37:34 · 4 answers · asked by Felt B. 2 in Business & Finance ➔ Personal Finance
not unless you are going to pay them any interest on the loan!!!! sure hope you make it -- hate to see your folks lose there home!!!!
2007-11-28 01:30:31 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You've got a very involved situation there. It will probably be very simple to determine if you are able to claim the home buyers credit. You say you did not own a home during that time because you signed over the mortgage. Did the mortgage company take you off the mortgage? Or did you and your wife just have an agreement on the side (legal of course)? The Irs will decide if an agreement between you and ex is valid enough to consider you a non-homeowner, so to speak. As for the loan, that should be ok. You are paying back money that was borrowed when you owned the home. I think the real issue here is how the IRS will look at an agreement between you and ex. If, of course, the mortgage company released you from the mortgage then you should be ok. Take all your paperwork, especially the divorce decree and your rent receipts, showing you were renting during the last 4 years. Good luck
2016-04-05 07:21:50 · answer #2 · answered by ? 4 · 0⤊ 0⤋
No one gets taxed for making of receiving a loan. The IRS will consider a portion of you payments to be interest on the loan. This is taxable to your parents and MAY be deductible as a business expense.
2007-11-24 13:16:31 · answer #3 · answered by STEVEN F 7 · 0⤊ 0⤋
$10,000 a year is a gift no tax.
2007-11-24 11:44:46 · answer #4 · answered by Anonymous · 0⤊ 1⤋