A. An intrafamily loan rather than a gift can be attractive if you’re not ready to part with your wealth — for example, because you’re concerned about having enough money to fund your retirement or you feel that your children aren’t ready to handle the responsibility. Intrafamily loans allow you to provide family members with […]
loan
Loans To Relatives
Loans To Relatives PUT ALL FAMILY LOANS IN WRITING Documentation is critical on any family loan. If the loan goes bad, you’ll want to claim a tax deduction. But, without proper paper work, an IRS auditor will say the transaction was a gift, which means no deduction for you and a possible problem with a […]
Bad Debts – Family Loans
Bad Debts – Family Loans If you made an ill-advised loan to a family member, the saving grace is that you’re allowed to claim a nonbusiness bad-debt deduction. Your write-off is considered a short-term capital loss. So you can use it to shelter your capital gains for the year. If the loss exceeds your gains […]
Bad Debt Write-Off Allowed For Family Loan
Bad Debt Write-Off Allowed For Family Loan In a recent Tax Court case (McFadden, T.C. Memo.2002-166), the court allowed a parent to claim a bad debt write off of more than $130,000.00 for a loan to his daughter that was used to buy a house. BACKGROUND A bad debt deduction may be available if a […]