- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
how can I justly avoid paying taxes on this?
Posted on 6/23/13 at 2:17 pm
Posted on 6/23/13 at 2:17 pm
Let a friend borrow a couple thousand cash for bills...was pretty sure I might not get paid back ever.
Well...he finally paid me back via a company check.
I should not owe taxes on this money but it would appear to be income if I were audited...any way around this?
I will deal with it if not bc I was surprised to get paid back anyway...
Well...he finally paid me back via a company check.
I should not owe taxes on this money but it would appear to be income if I were audited...any way around this?
I will deal with it if not bc I was surprised to get paid back anyway...
Posted on 6/23/13 at 2:24 pm to Tiger Attorney
What a shitty friend.
Posted on 6/23/13 at 2:26 pm to Tiger Attorney
This makes no sense. Just put it in the bank and don't report it. A few thousand is nothing
Posted on 6/23/13 at 2:35 pm to Tiger Attorney
Don't sweat that. Get the friend to sign an acknowledgment that the check was repayment of a loan if you're really concerned.
Posted on 6/23/13 at 2:50 pm to Tiger Attorney
Can't you draft a quick loan agreement that shows paid in full, have him sign it, and viola... audit documentation.
Posted on 6/23/13 at 3:12 pm to Tiger Attorney
I wouldn't worry about it unless I got a 1099 in the mail in January.
Posted on 6/23/13 at 4:00 pm to Tiger Attorney
quote:
And if I get audited?
This is actually an interesting question.
I would imagine that throwing together some documentation of the loan would be the answer but I'd like to see what some of our tax experts have to say.
Posted on 6/23/13 at 4:46 pm to Tiger Attorney
I'm not Poodlebrain, but the first question I'd ask is how frequently you get audited. Some small businesses do but if you're the average Joe it'll never happen and this isn't worth worrying about.
I'd be more worried about your friend. He is paying you via company check and therefore is probably writing off the loan as a business expense. And that's assuming he is a sole proprietor, if he isn't then he's cheating the other owners on top of that.
I'd be more worried about your friend. He is paying you via company check and therefore is probably writing off the loan as a business expense. And that's assuming he is a sole proprietor, if he isn't then he's cheating the other owners on top of that.
Posted on 6/23/13 at 6:06 pm to foshizzle
Exactly. He does not have to take it as income and then pay you. Thus the company check. I assume he is the business owner.
Posted on 6/24/13 at 1:24 am to Tiger Attorney
The simplest way to avoid paying tax on all of the money you were paid is to have the payer issue you a 1099-Int for the portion of the money that was interest. You report that amount as interest income, and the balance of the payment is not reported as income as it is the repayment of the loan principal.
If there was no interest paid on the loan, then you need to follow the rules for below market rate loans. You'll have to look them up, or consult with someone familiar with them, to see what the requirements are since they depend on the facts and circumstances of the original transaction and any subsequent payments.
If there was no interest paid on the loan, then you need to follow the rules for below market rate loans. You'll have to look them up, or consult with someone familiar with them, to see what the requirements are since they depend on the facts and circumstances of the original transaction and any subsequent payments.
Posted on 6/24/13 at 2:41 am to Poodlebrain
quote:
If there was no interest paid on the loan, then you need to follow the rules for below market rate loans. You'll have to look them up, or consult with someone familiar with them, to see what the requirements are since they depend on the facts and circumstances of the original transaction and any subsequent payments.
Whoa now. There's something accounting-related that Poodle doesn't know?
Posted on 6/24/13 at 8:56 am to foshizzle
quote:Actually, I am familiar with accounting for below market rate loans, usually loans made between related parties. It's just not possible to guess all of the facts and circumstances surrounding the OP's situation to give an answer that is more than a guess.
Whoa now. There's something accounting-related that Poodle doesn't know?
International taxation is an area I have little to no experience with. Oil and gas industry accounting is also foreign to me.
Posted on 6/24/13 at 12:40 pm to Poodlebrain
Just write loan repayment on the memo line before you deposit. /thread
Posted on 6/24/13 at 5:41 pm to Poodlebrain
quote:
Actually, I am familiar with accounting for below market rate loans, usually loans made between related parties. It's just not possible to guess all of the facts and circumstances surrounding the OP's situation to give an answer that is more than a guess.
Oh. In that case the Earth can resume spinning about its axis.
Popular
Back to top
Follow TigerDroppings for LSU Football News