I do I file when I receive loan money from brother who own half the deed of house to fix apartment?

Dan8tax
Dan8tax Member Posts: 4 Newcomer
in Situation & Life Changes

I do I file when I receive loan money from my brother who owns half the deed of house to fix up an apartment and am responsible in paying him back the loan using the potential rental income I would receive from the fixed apartment?

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Answers

  • MeganC
    MeganC FreeTaxUSA Agent Posts: 9

    Hi Dan8tax,

    Loan money from your brother is typically not considered taxable income, so it generally wouldn’t need to be reported on your tax return. However, rental income you earn from the apartment will usually need to be reported, and you might be able to deduct certain expenses like repairs, maintenance, and interest on the loan if your brother charges any.

    It’s a good idea to keep detailed records of the loan, the rental income, and related expenses. For more information, check out IRS Publication 527.

    https://www.irs.gov/forms-pubs/about-publication-527

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  • AleceN
    AleceN FreeTaxUSA Agent Posts: 19

    Typically, when you receive a loan, whomever the lender is, for a rental, you only report the interest paid back for the loan as a Rental Expense. (https://www.irs.gov/taxtopics/tc414) You will not need to enter the loan money received as income.

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