Скачать или смотреть The "Family Loan" Audit: How a $10,000 Loan Creates Phantom Taxable Income

You loaned your child money for a down payment or business. You didn't charge interest because they are family. WRONG. The IRS presumes family transfers are gifts, not loans. If you fail to charge the "Applicable Federal Rate" (AFR), the IRS will invent "Phantom Income" for you and tax you on money you never received. This is the "Imputed Interest" trap under IRC Section 7872.

As The Finance Observer, I’ve performed a forensic review of the Estate of Bolles case and the IRS "Below-Market Loan" rules. In this video, we dissect the "$10,000 De Minimis Exception," the "$100,000 Loophole" (why your child's investment income matters), and the exact steps to document a "Bona Fide Debt" so the IRS doesn't reclassify it as a taxable gift.

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FORENSIC BREAKDOWN:

0:00 The "Presumption" Trap: Why the IRS assumes every loan is a Gift

0:50 The Law: IRC Section 7872 & The "Applicable Federal Rate" (AFR)

1:30 The "Phantom Income" Audit: Paying tax on interest you never received

2:20 Case Law Audit: Estate of Bolles (Why a lack of collection efforts kills the loan)

3:35 Safe Harbor #1: The $10,000 De Minimis Rule (No interest required)

4:05 Safe Harbor #2: The $100,000 Loophole (Net Investment Income Cap)

4:45 The Reporting Fix: Schedule B Instructions for "Imputed Interest"

5:05 The 1099-INT Question: Do you need to issue a form to your child? (Usually No)

5:35 The Mortgage Exception: Seller-Financed Loans require SSNs on Schedule B

DISCLAIMER: I am The Finance Observer. This content is for educational purposes only. Intrafamily loans must meet strict "Bona Fide Debt" requirements; always consult a qualified CPA to draft a Promissory Note that complies with state law.