1. The tax-smart way to loan money to family members

    The tax-smart way to loan money to family members

    You may want to help a young family member buy a first home or help a financially challenged relative or friend by loaning that person some money. Nice thought, but if you follow through, please make it a tax-smart loan. This column explains how to avoid adverse tax consequences when you make a personal loan to a relative or friend. The interest rate issue Most loans to family members or friends are below-market loans in tax lingo.

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