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Can you deduct interest from a large family loan?

Kaitlin Dean

in Student Loans

1 answer

1 answer

Chelsea Hayes on April 13, 2019

Anything that is included in the above information would make the interest payments on the family loan deductible on your 1040 tax return.
To be deductible on your 1040 federal income tax return would have to be a legal qualifying mortgage.
Or legal collectible loan for a business or for investment purposes, etc
Both you and the lender must intend that the loan will be paid. In addition, you must be a true debtor-creditor relationship between you and the lender.
*The mortgage must be a secured debt on a qualified home in which you have an ownership interest. (Generally, a mortgage is a secured debt if you put your home as collateral to protect the interests of the lender. The term "qualified home" means your main home or second home. For more details, see Publication 936.)
For more information, go to IRS gov web site and use the search box for publication 936

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