Interest free loan without imputed interest to lender
A parent wants to give his son an interest free loan. 1. The parent wants to avoid pay taxes on the imputed interest associated with the loan. What options does the parent have regarding the non-existent interest? 2. The son is married. Does filing "married filing jointly" complicate the tax situation?
Quick Answer:
For an interest-free loan from a parent to a son, imputed interest rules (IRC Section 7872) generally apply, meaning the parent could be deemed to receive taxable interest income
Note: This answer is provided for convenience only. It is important that you speak to a CPA about your individual tax situation.
