Despite signs of an improving economy, times remain tough for many families, with mortgages and bills going unpaid. As a result, many adult children are asking parents for financial aid. When questioned, many parents are pleased to aid. However before doing so they should be aware that arcane tax laws lurk. Attention must be taken to avoid making unexpected tax liabilities. There are three common mistakes when loaning money to family members. These mistakes can convert a loan into a gift in the eyes of the IRS. If the IRS takes the position that a loan is really a gift, then the gift tax and income tax laws may come into play and the result is needless expense and complexity.
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August 3, 2011
Lending To Family Members? Avoid These Mistakes
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