If someone is repaying me the amount of 260,000.17 in a loan I gave them do I have to pay taxes on it?
- Nuff SedLv 78 months agoFavorite Answer
Yes, under US federal tax code, you pay taxes on the interest you "forgave" by not making them pay you anything beyond the principal amount you loaned them. The "applicable federal rate" for the "imputed tax" would depend upon the length of the loan, among other things, but the 2019 minimum rate is 2.27%.
That's little over $5,900 for a loan of $260k.
- Jerry SLv 78 months ago
interest is taxable.
- EvaLv 78 months ago
A loan principal repayment is not taxable. Any interest you received on the loan is taxable. This would be only if there was not a sale of property involved. There are different rules for installment sales.
- curtisports2Lv 78 months ago
How much was the loan? The interest received is taxable, the principal (what they borrowed) is not. If you loaned $240,000, then $20,000.17 is taxable interest.
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- JudyLv 78 months ago
Taxes are due on whatever part of the payment is interest.
- STEVEN FLv 78 months ago
Repayment of a loan is not income any more than withdrawing from a bank account. Any interest is taxable income.
- SlickterpLv 78 months ago
Only on the interest collected.
- StephenWeinsteinLv 78 months ago
You have to pay taxes on the interest if you are charging them interest, or on the amount of interest that would have been charged if you hadn't loaned them money without interest as a favor. You don't pay tax on the return of the money that you loaned, only on the interest that you either make or could have made.
- BortLv 68 months ago
If you gained income from it you have to pay taxes on it. If you loaned them that exact amount and they gave that exact amount back to you there was no income so you don't have to pay taxes on it.
- Martin SLv 78 months ago
Ask a tax consultant. It might be that you have to pay taxes on the interest or that you paid reduced taxes because when you gave the loan. Not enough info here. Check with someone who does this professionally.