Loaning $ to relatives My son wants to buy a house. Can I loan him money at the short-term AFR (applicable federal rates) if I loan him the money for 3 years? Currently it is about 0.69%. Also, can I make it so he pays me only interest for the 3 years and at the end of the term he would pay a balloon payment of the original loan amount? Also, can I just type up a loan agreement that we would both sign? I don't want the irs to think its a gift because its not. I just want to help my son with this purchase and for the two of us not get slammed with tax debt. I do realize I would have to pay taxes on the interest he pays me. |