Re: Can you borrow from your trust fund for your own benefit?
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At some point in time, the nature of the loans became a gift, even if there were legit notes. The son can never hope to repay that money.
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So if this is true, the son does not have to pay income taxes. You don't pay income taxes on gifts you receive.
-Tom
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The IRS does not agree with you. The son pays or dad pays for him. Someone pays.
NIN,
I have a hard time not seeing tax fraud here. The IRS is very harsh on below market loans and as you point out, it is very transparent. Maybe there's some corporation / partnership shenanigans here but I have a hard time not seeing fraud.
J
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