I have several children all of whom have been successfully launched for several years. However like many children these days, home ownership has been a bit of a problem. I have offered to loan all of them some money to help them out. Two of my children took me up on this. I emphasized that this was a loan from Dad’s bank and was a business transaction and not a gift. The loan documentation was properly prepared and I charged them the Applicable Federal Rate. The loans are for 15 years and if I die before they are paid off the notes will become part of my estate and the balance owed will reduce that child’s portion of their inheritance. I have sent each child a year end statement showing how much they paid in total, how much was interest, how much went against the principal, and the new balance owed. I have declared that interest paid on my tax return on Schedule B showing each child’s name as the payer. Since I wasn’t the seller the loans were not “seller financed mortgages”. My question is, do I need to send any type of paperwork to any taxing authority e.g. the IRS? Thanks for your help.
Statistics: Posted by Carolina Shagger — Sat Jan 04, 2025 1:01 pm — Replies 0 — Views 47