Kinston Accounting & Advising转发了
Loaning or giving Money to Friends & Family and Tax Implications For lender/giver: As long as the aggregate loan amounts to a single borrower are less than $10,000, and the borrower doesn’t use the loan proceeds to buy or carry income-producing assets. In that case, lender can charge an interest rate below the AFR, and there won't be any federal tax consequences — even if lender charges no interest. If the aggregate loan amounts are more than $10,000, lender should draft a formal loan agreement outlining terms like interest rates, repayment schedule, etc. The interest rate should be at least the Applicable Federal Rate (AFR) to avoid imputed interest and potential gift tax implications. The lender might have to report any interest income received when filing the tax return. If the person just wants to gift the money to another person, the giver might have file gift tax return (IRS Form 709) if it exceeds aggregate amounts. As of 2025, the annual exclusion limit is $19,000 per recipient. This means an individual can give away $19,000 to as many different people as they want in a single year without triggering the need for a gift tax return (IRS Form 709). For borrower/recipient: When borrower receives the money, if the total exceeds the $10,000 reporting thresholdthe, financial institution may report the deposit to the IRS. Even if you split the money into two checks/zelle/wire transfers, and deposit both of them simultaneously or within a short period, financial institution may still report it. This is standard practice and nothing to be overly concerned about if you are compliant with tax laws. Both lender and borrow should keep copies of loan agreement documentation. From the recipient's standpoint, there is no maximum limit on the amount you can receive as a gift. You could technically receive $19,000 from each of multiple individuals without any of them having to file a gift tax return or pay gift tax. As the recipient, you're also not required to report these gifts to the IRS or pay tax on them. Because all the information is included in the giver's gift tax return.