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legaleagle
legaleagle, Attorney
Category: Tax
Satisfied Customers: 13441
Experience:  Completed Fed Income Tax in law school, 10 years preparing personally tax returns
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If a family member wanted to loan me the money to purchase

Resolved Question:

If a family member wanted to loan me the money to purchase a new car what are the tax implications for both of us. Could they gift me the first $13000 and do a loan for the remainder if it did not exceed the $13000? and would I have to report the amount over the first 13000 as income if it was a loan?
Submitted: 2 years ago.
Category: Tax
Expert:  legaleagle replied 2 years ago.
The person receiving a gift has no tax implication. The one making the gift would have to report the gift if over the $13K exemption but they would not be taxed on that amount. If they give you a loan it is not income since you are raying it. They would have to report interest on the loan as income if they made you pay interest.
Customer: replied 2 years ago.

so if they loaned me the entire amount they would just have to report the interest each year and is there any regulation on how much interest they would need to charge me for the loan?

Expert:  legaleagle replied 2 years ago.
Correct if they made a loan and charged you interest they would have to claim the interest as income each year as they were paid. They do not have to charge any interest. That is up to you and them on the terms of the loan.
legaleagle, Attorney
Category: Tax
Satisfied Customers: 13441
Experience: Completed Fed Income Tax in law school, 10 years preparing personally tax returns
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