TurboTax

File with experts
File your taxes
Experts at your fingertips

An expert helps with your taxes, or does them for you
TurboTax Expert Full Service

TurboTax Expert Assist

TurboTax Self-Employed
Prior year taxes
File myself
File myself
Do it yourself

We'll guide you step-by-step
TurboTax Do It Yourself

TurboTax Self-Employed

TurboTax Desktop
TurboTax Free

Activate your product

Prior year taxes
Business
Business
Business taxes

Get your T2 corporate return done right, your way
TurboTax Business

TurboTax Business Desktop
Tax situations
Tax situations
Tax situations

Find extra guidance for your big life moves
For investors

For 25 and younger

For self-employed

For new to Canada

For life changes
Resources
Resources
Resources

Explore tax tools, get tips, and read reviews
Personal income tax calculator

RRSP savings calculator

Learning hub

TurboTax support (FAQ)

TurboTax community
Pricing

Community

Question

Any tax implication for borrowing $300,000 from family to buy a home property?

Forum|Forum|3 years ago
December 11, 2022
2 replies
0 views

If I don't pay any interest, there would be no tax implications on either side?

If I do pay interest, then my family will have to report interest income to IRS?

I look forward to hearing from you.

Thanks.

@april4mar - yes, there are tax implications.

here is one article on the topic

https://www.greensfelder.com/trusts-and-estates-blog/irs-publishes-afrs-for-may-2022#:~:text=The%20Internal%20Revenue%20Service%20has,loans%20to%20avoid%20tax%20complications.&text=The%20Section%207520%20interest%20rate%20for%20May%202022%20is%203.0%20percent.

here are the current IRS rates. Generally, the interest rate on the loan has to be in the 5% range to avoid tax issues.

https://www.irs.gov/pub/irs-drop/rr-22-22.pdf

See a lawyer.

Employee

The major tax implication of an interest-free loan of that size is what's called "imputed interest." This TurboTax help article explains:

https://turbotax.intuit.com/tax-tips/tax-payments/irs-tax-rules-for-imputed-interest/L7UbulHpC

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

april4marAuthor

Very educational. Thank you.