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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11373
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I am borrowing money from my mother to purchase a house. She

Customer Question

I am borrowing money from my mother to purchase a house. She is in Holland and the money is in a Netherland bank. Do I have to pay taxes on that money even though it will be repaid?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.
NO. YOU never have to pay taxes on borrowed money (for the exact reason you mentioned).
It has to be repaid.
Your mother (if she were a US citizen) would not deduct it and do not report it as income.
The only elements of a loan that are taxable are (1) interest (FOR the lender - IF that lender is a US citizen and SUBJECT to US taxes) and (2) Money borrowed and NOT paid back (this is called COD, cancellation of debt, income).
No this is not taxable.
Sorry for the data dump ... just wanted to put things in perspective.
Let me know if you have questions ...
Lane
Expert:  Lane replied 1 year ago.
Hi just checking back in to see if you saw the answer.
Again, your logic is good.
Because it has to be paid back it is not taxable to you.
Let me know if you have any questions at all.
Lane
If this HAS helped, I would appreciate a positive rating (using the stars or faces on your screen) That’s how I'm credited for the work here
Customer: replied 1 year ago.
Thank you very much.
Expert:  Lane replied 1 year ago.
You're very welcome ... a positive rating using the stars or faces on your screen woulld be thanks enough ... THat's the only way we're credited for the work here. Let me know if I can help again ... Lane If you'd like to work with me again here, just..Go here: http://www.justanswer.com/finance/expert-npvadvisor/