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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121563  
Subject: Re: Personal Loan Date: 5/17/2001 7:45 PM
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irasmilo: "Unless I read the original post wrong, this isn't a mortgage, it's a personal loan. The interest which the child pays to the parent in exchange for the parent lending the child the money is income to the parent. Unfortunately, the child cannot deduct the interest since, I assume, the loan is a personal loan and not associated with any business or investment purpose.

It's no different than when you "lend" money to a bank by opening a savings account. The interest they pay you for the privilege of using your money is taxable to you and is reported on a Form 1099."


IRA, I am not at all questioning that it is income to the parents; I was only confused as to who reported what to whom. And while I realzie that it is not a mortgage, a mortgage is basically a loan secured by real property. The mortgage lender lends me the money and I pay the mortgage holder interest. The interest is income to the mortgage lender, but I do not send an annual report to them.

Regards, JAFO


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