Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I have a quick question about promissory notes. My company…

Customer Question
I have a quick question...
I have a quick question about promissory notes. My company is loaning me $21,000 for a short time frame. I am to pay the loan back within 12 months. Do I owe tax on the $21,000 when it is paid back?The loan is structured to include 1.5% interest and the terms of the loan are all in the document. From what I can tell I am only charged tax on the $21,000 if the loan is forgiven and I don't owe the debt. Is that correct?
Submitted: 7 months ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 3 minutes by:
10/2/2017
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 7 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,223
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

HI, MY NAME’S LANE - I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice 1986.

...

That's absolutely right. Loan proceeds are never deductible to the lender nor taxable to the borrower.

...

UNLESS, as you say, the loan is not repaid (IRS calls this a net increase in wealth - anecdotally, Cancellation of Debt" - COD - income).

...

And in that case, the lender takes a bad debts deduction.

Ask Your Own Tax Question
Was this answer helpful?
Ask Wallstreet Esq. Your Own Question
Wallstreet Esq.
Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 586
586 Satisfied Customers
Experience: 10 years experience

Wallstreet Esq. is online now

A new question is answered every 9 seconds

How JustAnswer works:

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

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.WMatteson, 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.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, 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.

OrvilleHesperia, 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!!!!

AlexLos 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.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,495 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,272 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
If you are a member of a registered non-profit organization
if you are a member of a registered non-profit organization does an employee making less than $900.00 a year for office work have to file this with the IRA ? … read more
Lane
Lane
JD, CFP, MBA, CRPS
14,223 satisfied customers
Is California IHSS provider income deductible if the
Is California IHSS provider income deductible if the recipient is my mother who lives with me and I am her main care provider? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,124 satisfied customers
Does a non-resident alien have to report interest income
Does a non-resident alien have to report interest income received from the IRS on a tax refund?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Non profit UBIT and the 990T. Helping a friend non profit
Non profit UBIT and the 990T. Helping a friend non profit that recently sold rental house with a mtg. So I have the calculation on what of the total gain is taxable. But now confused on how to report … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,027 satisfied customers
Can a private individual invest in a non-profit organization
Can a private individual invest in a non-profit organization in the state of Iowa … read more
Lane
Lane
JD, CFP, MBA, CRPS
14,223 satisfied customers
Can i deduct medicare and secondary insurance premiums as a
can i deduct medicare and secondary insurance premiums as a medical expense on my az 140 schedule A form? … read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
837 satisfied customers
I received a cancellation of debt that increased my income
I received a cancellation of debt that increased my income by 6800, not they are saying my credit for my health care was too large and I owe the 4080 credit back. Does this sound correct? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Are property taxes on a first and second home tax deductible
Are property taxes on a first and second home tax deductible in the same year on schedule A?… read more
Lane
Lane
JD, CFP, MBA, CRPS
14,223 satisfied customers
I received several 1099s cancellation of debt forms and
I received several 1099s cancellation of debt forms and included them on my return. However, I received several more after I filed my taxes and want to know if I have to file an addendum OR if I can w… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,124 satisfied customers
Can I deduct the the Medicare Part premiums as a medical
Can I deduct the the Medicare Part B premiums as a medical expense? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
A question regarding interest deduction for time share
HI THERE. A question regarding interest deduction for time share payments. My wife and I have 2 time shares.. Blue Green .and Diamond Resorts. Both annually mail us interest paid reports for taxes. Th… read more
Carter McBride
Carter McBride
LLM
1,077 satisfied customers
Can I take mortgage interest and the standard deductions?
Can I take mortgage interest and the standard deductions? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
I am assuming that cancellation of debt income changes my
I am assuming that cancellation of debt income changes my basis for the stock I sold in the MLP limited partnership stock.… read more
Carter McBride
Carter McBride
LLM
1,077 satisfied customers
Tax deductions. Can i deduct the conversion on my income
tax deductions JA: The Accountant will know how to help. Please tell me more, so we can help you best. Customer: can i deduct the conversion on my income taxes JA: Is there anything else the Accountan… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Taxes Are car ease payments subject to a max deduction of
Taxes Are car ease payments subject to a max deduction of 3,360 like car depreciation or do you just add back the lease inclusion from lease inclusion tables… read more
Lane
Lane
JD, CFP, MBA, CRPS
14,223 satisfied customers
Can I deduct mortgage interest, real estate taxes, utilities
Can I deduct mortgage interest, real estate taxes, utilities and condo fees for a commercial rental property that I have not made available for rent? I am assuming that Building appraisal fees, and le… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
As per the new tax law, the property tax deductions of 10000
As per the new tax law, the property tax deductions of 10000 is it per property or per tax payer per property?If both wife and husband file together can they claim 20000 towards one property or just 1… read more
Lane
Lane
JD, CFP, MBA, CRPS
14,223 satisfied customers
The 2018 tax law will allow homeowners to deduct property
The 2018 tax law will allow homeowners to deduct property taxes and either income or sales taxes with a combined limit on these deductions being limited to no more than $10,000. What does this mean? w… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x