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I'm not a tax expert, so I'll be curious to see whether my gut reaction of "No, not if you actually charged interest, and he actually paid it and plans to deduct it" is correct. I would think that there would be a mechanism to deal with the current year -- i.e. you could refund what you had charged him so that by the end of the year the interest charged for 2016 would be zero.

But anticipating others' questions, I'm curious about why you charge interest at all if you plan to gift it back? Is it purely so that your son can take the deduction? I suspect that this falls into having your cake and eating it too -- he can't take the deduction if you're not claiming the income.

Curious to see what others say, but a bit of elaboration on that might complete the picture.
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