<BLOCKQUOTE><font size="1" face=" Arial, Verdana, Helvetica">quote:</font><HR>Originally posted by bob8:
I have a friend who is about to settle a malpractice suit. During that time he was unable to pay his bills and I loaned him the money. He will pay me back from the proceeds of the settlement which I understand is not taxable. My question is: Is the money he pays me, over and above the actual dollar amount I loaned him, considered a gift and taxable as such?
It's not a gift, it's considered interest income, and is taxable.
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