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If a family member gives a 50,000 dollar loan to another, how is the interest income reported and what are the tax consequences/reporting responsibilities for each pary?

The income is reported on Schedule B. There's no information reporting requirement, except possibly for the payee if a real estate mortgage is involved. I'm pretty sure that only financial institutions or "ordinary course of business" lenders have to file 1098's, but the instructions for that form should clarify.

Phil Marti
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