[manny1010]

For example:

I own a small business. My grandparents “lend” me $15,000. I pay them as I can. When I fill my income tax return, will the loan be considered income and I will need to pay taxes on it?

Thanks for your help,

Emmanuel

AUD
REG
FAR
BEC

[lolo]

@Spartans92, Thank you that is really helpful. Regarding your question about the difference between call and put option.

In call option you expect that prices will go up, so you plan to buy a call option to buy future “stocks” on predetermined price. to make it clear suppose the current price is 10$ and you expect that it will rise to 12$ or more then you buy a call option on price say 10.5$. which means that this option will enable you from buying a specified number of stocks on that price. at some point of future say that prices went up to reach 13$. then you will go and by on 10.5$ on that price and and resell them in market on 13$.

in put option is just the opposite, He just expects the prices to go down then he buys a put option to sell on predetermined price lets say on today's price 10$ and the prices at some point dropped to 8$ then you will go to the market and by stocks at 8$ and then resell them using that option on that specified price (at 10$).

Hope that's useful

My Nick name is sunshine, but the fact is I have not been in touch with it since I started this CPA exam! IT HURTS

AUD - ✔ Passed Becker self study!
BEC - ✔ Passed Becker self study!
FAR - ✔ Passed Becker self study!
REG - TBD

[FIFOisbetterthanLIFO]

Guys, if someone gives over 14,000 per person to the same person in one year it doesn't mean its taxable. It means they have to file form 709 and only if they exceed the lifetime threshold ~5.4 million/person that they have to pay tax.

And @OP…if you are going to claim the money as a loan and deduct interest, then be prepared to pay tax on it if it is forgiven. You can't deduct business interest and then later say “OH sorry IRS, it was a gift so I don't have to pay tax even though it was forgiven”.

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