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April 28, 2023
Question

foreign relative loan repayment interest tax

  • April 28, 2023
  • 2 replies
  • 0 views

I took out 250k from HELOC and lent it to my foreign relative. A year later he repaid the loan with just enough interest to close out my HELOC. Do I need to file any forms for his 250k transfer back and is there any tax implications on my side?

 

    2 replies

    Employee
    April 28, 2023

    The interest that he paid you has to be reported as interest income. 

    April 29, 2023

    and you get no deduction for the interest on the HELOC. 

    Love2BikeAuthor
    May 3, 2023

    And if I used proceeds from HELOC to invest (say in stocks) and made profit from that investment, I cannot deduct HELOC interest from my investment profit as an "expense"?

    Employee
    May 3, 2023

    Correct. That interest is only deductible if you use it to buy, build or improve your home.