Be careful with intrafamily loans

Description

Abstract: When a family member experiences hard times, other family members might be quick to lend them whatever amount they need. But Uncle Sam keeps an eye on such transactions. Why? Because they might not, for tax purposes, be loans. The IRS might consider them taxable gifts. This article explains the difference between loans and gifts, and why it’s important to charge enough interest to avoid the tax consequences of making below-market loans.