This article in AccountingWeb by Julian Block talks about some things the IRS looks at to differentiate a loan from a gift, especially between related parties. Click on the link here:

http://www.accountingweb.com/article/how-irs-tells-loan-gift/223342

There is a lesson here – make sure you document any loan you make with a note, including interest rates and repayment schedules. This will help keep the IRS from calling the loan a gift.

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