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"Real" private loans tax deductible?

Discussion in 'Financial Aid' started by md2011, Feb 19, 2007.

  1. md2011

    md2011 Member
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    I think private loans that everyone talks about is the loan from banks and private institutions. I wonder what if I can find some relatives to borrow money from (won't it be nice to give the high interest to your own people?), when I pay back these loans, can I get the same kind of tax deduction as the other formal loans?
     
  2. edmadison

    edmadison 1K Member
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    IRS excludes loans from relatives. See IRS publication 970 for details

    ed
     
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  3. studentloanman

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    The money is so easy to borrow and the interest usually isn't that high anyways. . . you don't really need to go to a relative.

    I give people advice on this stuff all day long.

    Also, the there's a difference between the interest on the FFELP loans (which are often from private lenders) and private loans or alternative loans (which are also from "private lenders"). . . When it comes to tax deductions, I always recommend my clients talk to a CPA who REALLY knows the law (maybe 5% of CPAs are helpful beyond simply filling out paperwork). . .
     

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