When my husband passed away unexpectedly, my sister and my brother-in-law helped pay for his funeral expenses. They aren’t expecting repayment, but I have saved and budgeted and would like to pay them back. They are both retired. I want to know how much I can give them at a time so they won’t have to report the money as income on their income taxes.
Thank you.
Good question from you, very kind. How much was the funeral?
I need to clarify my question. My sister and brother-in-law didn’t pay the entire amount of his funeral. I just want to repay them the portion they did contribute. I want to be sure when I do repay them that I don’t cause them to have to report my repayments to them as income. I am gifting them. I won’t be gifting them their entire portion at once. I will be gifting them in increments. I am only concerned that my gifts are not too much at a time.
Which relative
On Tue, Sep 8, 2020, 2:12 PM The Penny Hoarder Community <
community@thepennyhoarder.com> wrote:
Here you go: Click Here
Personal loans can be made by a bank, an employer, or through peer-to-peer lending networks, and because they must be repaid, they are not taxable income. If a personal loan is forgiven, however, it becomes taxable as cancellation of debt (COD) income, and a borrower will receive a 1099-C tax form for filing.
I would think if it is treated as repayment and not as a gift that it would not be taxed. You are technically refunding them their own money not gifting them.
Thanks to everyone for your thoughtful replies!
