Tax implication of receiving a loan

is there any tax (both for lender and borrower) when you receive a cash loan from a family member (short term)? not a gift.

Answer #1

Not that I’ve ever heard, loans aren’t taxed…however if YOU pay the family member interest on the money, then they would be liable for the interest paid…and, if it’s for a purpose which you can deduct, then you could potentially deduct the interest paid, in whole or part, on your 1040…however, consult a tax professional for more granular information, or consult the IRS website, at irs.gov.

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