You might assist a family that is young purchase a primary house or assist a economically challenged general or buddy by loaning that individual some cash. Nice thought, but in the event that you continue, please ensure it is a tax-smart loan. This column describes steer clear of unfavorable taxation effects once you make an individual loan to a family member or friend.
The attention price issue
Many loans to family unit members or buddies are below-market loans in taxation lingo. Below-market means that loan that charges no interest or an interest rate underneath the relevant rate that is federal or AFR. Continue reading