Ask Terry Questions Money from friend

Money from friend

By Terry Savage on January 29, 2021 | Wild Card

A simple question having difficulty getting anyone to answer without charging for it. Just one simple question. If someone pays off my credit card balance ( $6,000) and transfers $3,000 to my personal bank account, is there obligations for this? Thank you very much for any help

Terry Says

No tax obligation. This could be considered a gift — and anyone can gift up to $15,000 to anyone every year with no tax obligation. Your only “obligation” would be to repay it if it is a loan, not a gift. You should carefully document the terms of this plan, and both should sign in agreement.

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