05-15-2014, 08:34 PM
Totally agree on the lawyer problem. It should have been very easy to show a chain of money.... "Here I have a cancelled check for $25,000 from the loaner to you. Your signature is on the back. What was that ? "
"A gift".
"Did you pay gift tax on it ? (aside) we should probably let the IRS know."
"It was a loan ! Not a gift !"
Also, did the loaner declare the interest on the loan in their taxes to the IRS ?
My mother has done family loans. Substantial ones... angel investments, mortgages, etc.. She writes an agreement, gets it notarized, files it with her lawyer. And pays taxes on the interest at the official 'minimum interest loan rate' that the IRS requires.
"A gift".
"Did you pay gift tax on it ? (aside) we should probably let the IRS know."
"It was a loan ! Not a gift !"
Also, did the loaner declare the interest on the loan in their taxes to the IRS ?
My mother has done family loans. Substantial ones... angel investments, mortgages, etc.. She writes an agreement, gets it notarized, files it with her lawyer. And pays taxes on the interest at the official 'minimum interest loan rate' that the IRS requires.