Foreign Loan

[doodah1]

What is the name of your state? Work in NY, reside in CT.

I, US resident, received 100,000K loan from my uncle, 10K loan from my mother, and 10K gift from my uncle, total of 120K. Both my uncle and my mother are non-US citizens/residents and live in a foreign country. They transferred the money to my account in their foreign country and I transferred it to my account in US. I used all 120K as a down payment of my house. I will pay them back (no interest), when I sell my house by 2010.

In order to get a mortgage to finance my house, I had them sign papers stating that the money was gifted to me. The mortgage company wouldn't lend if I did not provide these signed papers.

Should I report it as gift or loan? I read in the forum that I need to file 3520 if I report it as gift. If I can consider it as loan, what kind of documents should I provide? What is your suggestion?

Thank you in advance.

 

[abezon]

If you have a written contract with your uncle specifying that the $100k was a loan, you don't need to file anything. If you don't have a written agreement, then the money was a loan because he can't make you pay it back. Than you need to file form 3520, part VI. That part of the form is quite simple.