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Gingerale91 · Joined: 22 Jun 2010 Posts: 1 1.26 Dollars($)

I took out a loan for $4600 in april. Is this taxable? how much should I start putting aside for taxes?

jenkin7 · Posted: Tue Jun 22, 2010 11:35 pm Post subject:

Hi Gingerale,

Loan funds are not considered to be your income because you have the obligation to pay it off in full. Be it a personal, business or a home loan, you have the responsibility to repay it within a certain period of time. Moreover, if you take a home loan, you can deduct the interest you pay on it from your taxes. But this does not happen in case of a personal loan.

Though the loan funds are not taxable, you'll have to pay taxes if the entire or a portion of the debt is forgiven. If the debt is canceled, you do not have to pay it off. This canceled amount will be considered as your taxable income.

alencooper · Joined: 30 Jun 2010 Posts: 5 2.15 Dollars($)

I think the loan and funds proceeds are not taxable. It is the responsibility for you to repay in agreed time in full with interest. So I think the amount of the $4600 is not taxable.

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