I’m hoping someone can double-check that my understanding of the following is correct:
1. My in-laws, who are Australian citizens want to make a personal loan (not from a trust) of $1m ($667k USD) to me and my husband.
2. I’m a US citizen and my husband has a green card. We live in NJ.
3. The loan would be set at the applicable Federal rate (AFR).
4. We would not make payments on this loan. Each year, the interest will be forgiven and counted as a gift.
5. Because the interest forgiven is less than $100k, which is the IRS gift limit from foreign persons, Form 3520 would not need to be filled out.
6. Lawyers have drafted the loan agreement and included terms that removes our obligation to withhold tax and remit to the IRS.
7. Interest on the loan represents assessable income for my in-laws.
1. My in-laws, who are Australian citizens want to make a personal loan (not from a trust) of $1m ($667k USD) to me and my husband.
2. I’m a US citizen and my husband has a green card. We live in NJ.
3. The loan would be set at the applicable Federal rate (AFR).
4. We would not make payments on this loan. Each year, the interest will be forgiven and counted as a gift.
5. Because the interest forgiven is less than $100k, which is the IRS gift limit from foreign persons, Form 3520 would not need to be filled out.
6. Lawyers have drafted the loan agreement and included terms that removes our obligation to withhold tax and remit to the IRS.
7. Interest on the loan represents assessable income for my in-laws.
Statistics: Posted by nimo956 — Sat Dec 16, 2023 11:20 pm — Replies 5 — Views 602
