Tuesday, October 12, 2010

Loans Amongst Family Members

1) Intra-Family Loans (aka Loans amongst Family Members)  

If a family member loans money to another family member money and charges no interest or a rate below the applicable federal rate, the lender will be deemed to have made a "gift Loan". The lender will have to report the forgone as well as the actual interest for each year the loan is outstanding as ordinary Income. However, no part of the interest actually paid or imputed is deductible by the borrower if the loan is not business related. Reportable amount will be as follows                               

LOAN AMOUNT
REPORTABLE AMOUNT
$0 to $10000
$0
>$10000 to $100000
The Lesser of
*Net Investment Income or
*Int. calculated using AFR Applicable Fed Rate Minus Int. calculated using stated rate of the loan
>$100000
Int. calculated using AFR Applicable Fed Rate Minus Int. calculated using stated rate of the loan


Posted by at

1 comment:

  1. UnknownJuly 19, 2016 at 12:02 AM

    Hey, nice info you posted here about Family members loans! Keep up the excellent work!

    Healthcare Finance | Medical Loans

    ReplyDelete

As you can see, I am not being detailed in my postings. It is a deliberate act on my part. I am a strong believer of a two way communications. By engaging ourselves in a two way communication there is a high possibility that we can learn something new from each other. As such, you should feel free to comment on my postings or give me any feedback which should not only be limited to compliments. Pointing out my shortcomings or ineptness will be greatly appreciated!!!!!!!!!!

Subscribe to: Post Comments (Atom)