I obtained a loan from my line of credit to give it to a relative. he agree to pay me the same amount of interest that i was paying to the bank for this loan. I have received 1099- Int from relative and the same 1098-Int expense form the bank. Where do I show these offsetting numbers on form 1040?
to pay me the same amount of interest that i was paying to the bank for this loan. I have received 1099- Int from relative and the same 1098-Int expense form the bank. Where do I show these offsetting numbers on form 1040?
The interest income is shown on Schedule B (or directly on Form 1040 if total interest income is less than $1,500) and the interest expense is shown in the interest section of Schedule A as "investment interest."
to pay me the same amount of interest that i was paying to the bank for this loan. I have received 1099- Int from relative and the same 1098-Int expense form the bank. Where do I show these offsetting numbers on form 1040?
If this is a personal loan to a relative, there is no investment interest expense to deduct.
to pay me the same amount of interest that i was
the same 1098-Int expense form the bank. Where do I show
Why not? The relative pays interest.
If I borrow (paying interest) and lend out that same money (receiving interest) shouldn't I only be taxed on the profit (spread in interest rates) rather than the interest I receive?
Seth
agree to pay me the same amount of interest that i was
the same 1098-Int expense form the bank. Where do I show
Sorry, my brain is fuddled... I was thinking about the expense incurred by the relative who borrowed the money. The person who borrowed from the bank would have investment interest expense as long as he kept adequate records that traced the money he borrowed to the money he lent.
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