Family Loans, Down Payments, and Forgiveness: Gift or Debt?
Compare promissory notes, interest, annual exclusions, imputed-interest concerns, and documentation.
The practical answer
Compare promissory notes, interest, annual exclusions, imputed-interest concerns, and documentation. Confirm the facts and evidence first, apply the relevant rule second, and document the decision and follow-through.
Decisions to organize
Use these decision points to turn the topic into verifiable actions.
- Write terms before funds move
- Track payments and interest
- Review gift reporting
Evidence checklist
Forms and deadlines
Issues to flag for review
- Assuming a trust automatically reduces income tax
- Losing inherited basis evidence
- Missing portability or estate-return elections
- Treating an inheritance as ordinary income
Frequently asked questions
What should I review before acting?
Compare promissory notes, interest, annual exclusions, imputed-interest concerns, and documentation.
When should professional review be added?
Add review when facts, forms, deadlines, elections, or consequences remain uncertain.
Sources and important note
General educational material based on the official sources below. Confirm tax-year facts and your individual circumstances before filing or acting.
Turn the guide into a plan.
Bring the records, questions, and deadlines that apply.