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No. of Recommendations: 2
The IRS might impute the difference between that rate and market rate as income and tax your mother accordingly.

From what I'm reading, I don't think so.

https://scholars.law.unlv.edu/cgi/viewcontent.cgi?article=18...

"provision could cause disaster victims to have to recognize as
taxable income the amount of interest she is not paying because her below
market interest rate is below a minimum specified interest rate. 164 Fortunately
for disaster victims any loans "subsidized by the Federal, State (including
District of Columbia), or Municipal government (or any agency or
instrumentality thereof), and which are made available under a program of
general application to the public" are exempt from the requirement to include
imputed interest in gross income. 165

...

165. Prop. Regs. § 1.7872-5T(b)(5). "

One other item to note is *if* could use the mortgage interest deduction before, it would not apply to this loan as the loan is not backed by the property. (that's a big "if" - many people don't itemize, and the mortgage interest deduction is irrelevant)
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Try this: https://www.sba.gov/funding-programs/disaster-assistance

Apparently the same loans for businesses and homeowners in disaster areas.
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No. of Recommendations: 3
The loan appears to be a really good deal at 1.1%, no payment due for 12 months, 30 year term. ...
My question is whether anybody here has any experience with these types of loans. Good deal? Bad deal? Any caveats?


I'd ask whether the loan's interest accrues during the 12 month no payment due period. Also, check into the impact on her credit rating of an outstanding loan (especially of such apparent size) that has had no payments made on it for so long a time. Such no payments due for extended periods, associated with furniture buys, often have negative impacts.

Also, the 1.1% rate seems markedly low for what amounts to a mortgage loan. The IRS might impute the difference between that rate and market rate as income and tax your mother accordingly. On the other hand, the difference might not be enough for the IRS to impute, or as an SBA loan, the question might not even come up. It's worth asking about, though.

Eric Hines
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No. of Recommendations: 2
The IRS might impute the difference between that rate and market rate as income and tax your mother accordingly.

From what I'm reading, I don't think so.

https://scholars.law.unlv.edu/cgi/viewcontent.cgi?article=18...

"provision could cause disaster victims to have to recognize as
taxable income the amount of interest she is not paying because her below
market interest rate is below a minimum specified interest rate. 164 Fortunately
for disaster victims any loans "subsidized by the Federal, State (including
District of Columbia), or Municipal government (or any agency or
instrumentality thereof), and which are made available under a program of
general application to the public" are exempt from the requirement to include
imputed interest in gross income. 165

...

165. Prop. Regs. § 1.7872-5T(b)(5). "

One other item to note is *if* could use the mortgage interest deduction before, it would not apply to this loan as the loan is not backed by the property. (that's a big "if" - many people don't itemize, and the mortgage interest deduction is irrelevant)
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Off topic, but I'm curious if being a victim of a crime, or alleged crime, would be something that would come up in the returns of those that lost their homes, or worse.

I haven't kept up with the news, but I believe I heard arson was the suspected cause?

We took a drive through the area a few weeks ago, very sad to see the devastation. I was surprised to see that it had burned east of 99.
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