How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Rakhi Vasavada Your Own Question

Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 3889
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
43581946
Type Your Finance Question Here...
Rakhi Vasavada is online now
A new question is answered every 9 seconds

Dear Bill,( finance ) I HAD GIVEN $ 100,000

Resolved Question:

Dear Bill,( finance ) I HAD GIVEN $ 100,000 ABOUT 7 YEARS AGO. SHE WAS TO GIVE BACK AFTER SOMETIME. SHE LIVES IN INDIA. I DID'NT EXPECT ANYTHING IN RETURN. SHE COULD NOT RETURN THE MONEY. BUT IN PLACE OF THAT SHE AGREED TO GIVE ME ABOUT 12% INTEREST.WE AGREED TO IT. SINCE IT WAS GOOD RETURNS I ASKED HER TO KEEP THE PRINCIPAL AND LET THE INTEREST ACCRUE. SHE PAID 30% TAX TO INDIAN IRS EACH YEAR AND HAS BEEN RENVESTING THE INTEREST SOMEWHREIN INDIA. QUESTION:- IF AND WHEN I GET THE MONEY BACK WILL I OWE TAXES AGAIN TO U.S. GOVT ? LIKE WISE IF WE HELP OUR CHILDREN OR OTHER 1ST DEGREE RELATIVES WITH MONEY INTERST FREE FOR ANY PURPOSE WE WOULD OWE ANY TAXES TO IRS ? THANK YOU, XXXXX XXXXX xxxx

Submitted: 1 year ago.
Category: Finance
Expert:  Rakhi Vasavada replied 1 year ago.
Dear Dinesh,

It seems the expert you requested is not available at this moment. Let me try and help you instead.

This question is little different than your first one. You are asking about Interest free loans, and its tax consequences.

YES, you can help your first family members. But before you give out money, you need to make sure whether you are giving away as gift OR if your are lending them as a loan.

Let me explain why. If you are lending them as loan, whenever you will receive it back will you will have to pay tax on the interest earned. Even if you make out interest free loan, IRS will tax you. If you make a loan to a family member and charge zero interest, you may face unfavorable and complicated tax rules. But you can avoid tax-law complications if you charge an interest rate that at least equals the IRS-approved applicable federal rate (AFR). Because AFRs are almost unbelievably low right now, you can be nice to yourself by charging the AFR while still being plenty nice to the borrowing family member as well. AFT currently hovers around 1.07% for "mid-term" loans over three years but not over nine years.

Coming to the second part, if you give away money, with no intentions of getting it back merely with an intention to help your close / first family members, you can gift $14,000 if single or $28,000 if married without incurring any tax liability. However, you can gift $100,000 but that you will have to use your $5 million lifetime exemption limits so far as additional amount goes. You will still not incur any tax liability.

I am sure this would help.

You may please leave a positive rating if this helps. Alternatively, please feel absolutely free to revert with further queries and I shall be more than happy to keep assisting you.

Warm Regards
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 3889
Experience: Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
Rakhi Vasavada and other Finance Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
< Last | Next >
  • http://ww2.justanswer.com/uploads/RA/rakhi.v/2012-7-3_14374_RakhiVasavadaL.64x64.jpeg Rakhi Vasavada's Avatar

    Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1890
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    1755
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg JKCPA's Avatar

    JKCPA

    CPA

    Satisfied Customers:

    838
    Bachelors degree and CPA with Accounting experience.
  • http://ww2.justanswer.com/uploads/starside8/2010-2-16_55433_DSCN1175.JPG Eric's Avatar

    Eric

    Financial Manager

    Satisfied Customers:

    558
    Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Accountant

    Satisfied Customers:

    397
    Intuit Ask a Tax Expert. QuickBooks Certified Pro Advisor (all editions)
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    324
    NASD Licensed Rep, 1997-2001, Business Attorney