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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 14053
Experience:  15years with H & R Block. Divisional leader, Instructor
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Can an individual that made a loan to a charity get a tax

Customer Question

Can an individual that made a loan to a charity get a tax deduction for donating the annual loan interest instead of receiving the loan interest?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Hello

The amount donated may be deducted as a charitable gift or it can be an interest free loan (depending on the amount of the loan).

Iindividuals can make up to $250,000 in interest-free loans to nonprofits (qualified 501(c)(3)s) each calendar year without imputed interest or phantom interest but also no charitable deduction for value of the “gift” of the interest from the tax-free loan).

If over that amount of loan then the interest is added as income and a deduction is taken on Schedule A.

Expert:  Robin D. replied 1 year ago.

If my answer addressed your question please rate below or above (let me know if you have difficulty as I believe the system changed), if you need more information reply below.

Expert:  Robin D. replied 1 year ago.

Please advise if you need more information or rating in a positive way is acceptable.