How to receive $30k loan from parents?

What is the best way to receive a 4-month $30,000 loan from my parents. Could they each gift me $10k and then loan me the remaining the $10k at prevailing interest rates? Then I just gift them back the $20k and pay back the $10k loan with interest?

Since my parents hold joint accounts on everything, how exactly would the IRS know which parent gave $10? Or is it $20k per couple?

Reply to
nonsense
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Why not just do it as an actual loan? Your folks will be required to charge interest. But legally that would be the cleanest.

If it's loans, each one can give you $12,000 each year. So they could give you $24,000 now and another $6,000 in January. If you're married it's double. But them making gifts to you and then you making gifts back is a lot more trouble than it's worth.

Stu

Reply to
Stuart Bronstein

If I go the loan amount, why is there a $12k limit/year? I would think there is no limit so long as they are charging market value interest rates?

Regarding the gifting, what more do we need than a signed piece of paper saying the money was gifted and gifted back?

Reply to
nonsense

The $12K limit is the gifting limit; nothing to do w/ a bona fide loan.

For gifts under that, there's nothing at all required.

In fact, creating a paper trail of a supposed "gift" w/ the strings attached that it was expected to be paid back would negate it actually being a gift. Of course, that there's any expectation written or not that the purported gift is to be repaid means it isn't really a gift at all but a sham to avoid legitimate loan and (presumably) the need of the "gifter" to report interest as income and the need for the "giftee" to pay interest.

Reply to
dpb

There is no such limit (as stated by dpb). Where Bronstein said, "If it's loans, each one can give you $12,000 ...," I believe he made a typo and should have said, "It it's gifts ..."

Reply to
Bill Brown

Exactly. Thanks for the correction.

Stu

Reply to
Stuart Bronstein

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