I loaned my parents $700,000. Due to the amount of money, I had a written loan agreement with them. I only charged 3% interest rate to cover inflation. I am not in the business of providing loans and did not consider this to be a commercial agreement.
They could not pay the debt over time so instead agreed to transfer their property into my name. It was independently valued. The property value was roughly equal to the principle ($700k) and interest of the loan ($100k), and I paid them $60,000 to cover the difference. Is the $100k interest received assessable on my income tax?
- Daniel, Gold Coast, QLD
Read the response from Jacky Ng of Lifestyle Financial Services in Chatwsood, NSW
Read the response from David Nelson of The Money Matrix Advice in Adelaide, SA
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