*Loan,banking and credit>>>tax advice

Free tax advice?

I am in debt to my father for a large sum of money that he has loaned me over the years.I know he never expected it back,but he has fallen on very hard times and is in "dire straights" to put it mildly.Can I take a loan on my house and pay him back around 45k, without he or I having to pay any "income" or other taxes.I did the math and I know I owe him more than that.I would like to repay my debt to the man without having to pay tax on money I already paid taxes on.Please...Please....Please advise me!!!!

Thank you

You can borrow and pay him back without any tax consequence to you. However, dad may have to report some interest income on the loan repayment. If you did not have a formal loan agreement with a stated amount of interest and dad does not report any interest income then, if he should get audited, the IRS can calculate and add interest income to his return. This would result in additional taxes due, interest on the taxes and penalties.

If dad chooses to leave it off his return that is his business, since I'm not doing his return, but you should be aware that may cause problems. Source(s): Practicing CPA

If your father owns a house, consider buying an interest in the house. You can then give up to $12,000 of you share back to him each year. This is a legal means of transferring property without gift tax consequences.

You can, yes
there would be no taxes due for you or him...in fact you might get a tax deduction for the closing fees, interest and all the associated costs of refinancing.
In 2005 you could give a gift valued at up to $11,000 without YOU having to pay taxes on it. The value may be different for 2006 and/or 2007. See this IRS site http://www.irs.gov/newsroom/article/0,,i... for more info. You will not have any income tax on taking a loan on your house. You might have tax on your house if you SOLD it and made more than $250,000. The recipient of a gift generally doesn't have to pay taxes, it is the responsibility of the donor. Think about this - give him $11,000 in 2006, $11,000 in early 2007 (like 1/2/07) and loan him the rest at a low interest rate.