My parents are taking out a home equity loan to lend me money to start a business, does anyone get taxed?
Felt B. asked:
I’m looking to open a shop and my parents offered to lend me some money to help out. They are taking out a home equity loan to lend me about $35,000 to $55,000. I agreed to pay them back. Because they are taking out a loan do they have to pay any taxes? Do I have to pay taxes on this money?
I’m looking to open a shop and my parents offered to lend me some money to help out. They are taking out a home equity loan to lend me about $35,000 to $55,000. I agreed to pay them back. Because they are taking out a loan do they have to pay any taxes? Do I have to pay taxes on this money?
I don’t have any assets so I wouldn’t be able to get a loan for the amounts of money I posted.
September 13, 2008
• Tags: Money To Start A Business, Parents, Pay Taxes, Start A Business, Start Business • Posted in: Personal Finance
3 Responses to “My parents are taking out a home equity loan to lend me money to start a business, does anyone get taxed?”
$10,000 a year is a gift no tax.
No one gets taxed for making of receiving a loan. The IRS will consider a portion of you payments to be interest on the loan. This is taxable to your parents and MAY be deductible as a business expense.
not unless you are going to pay them any interest on the loan!!!! sure hope you make it — hate to see your folks lose there home!!!!