Comments on: Tax Mechanics of Intra-Family Loans

By: Suzanne Lukas

Suzanne Lukas — Thu, 24 Mar 2011 15:43:33 +0000

I am making a $ 100,000 loan to my daughter to help her pay remodeling costs on a residence she recently bought.
Want to set it up as a 9 yr. balloon, to give her flxibility of repayment. Interest will be paid monthly. Expect full prepayment in about 4-5 years from her employment bonuses. Since it is a non amortizing loan which AFR amortization rate is applicable?
She receives restricted stock from her employer. If she has investment income from selling those stock, or other employment related sources,does that affecct the interest treatment of this loan? What if she uses those gains for principal prepayment? What if the loan is unsecured and interest is not deductible? Could you comment on these issues on your website?
Any guidance will be much appreciated.
Sinceerely, Suzanne Lukas

By: Kenneth Elliott

Kenneth Elliott — Tue, 03 Nov 2009 04:34:31 +0000

The tax codes are so complicated. I don’t think that the Government should tax loans to family members. Just does not seem right. Anyways, I don’t lend to family. They tend to not pay it back.
Kenneth Elliott

By: A Couple of Carnivals and a Fun Movie Trailer about Beer | My Journey to Millions

Tue, 14 Apr 2009 13:26:24 +0000

[...] Mess with Taxes hosted the 52nd Tax Carnival and chose my “Tax Mechanics of an Intra-Family Loan” Post.Â Great Carnival with a lot of articles ranging from How to file for aÂ Tax Extension [...]