5 ms·
> if your friend/family _steals_ the money from you and repays it later that year, they could potentially get a short-term, interest-free loan without incurring
by bonyt 6y ago
> if your friend/family _steals_ the money from you and repays it later that year, they could potentially get a short-term, interest-free loan without incurring the tax implications
If we want to close this loophole (if it's not closed elsewhere in the code) - I feel like the logical way to handle it would be to treat it as if they stole the imputed interest as well. I don't think § 7872 applies, but this would be in the spirit of that section to balance things out.
So, you'd treat the transaction as though they stole the item plus the interest required to "borrow" it, and then only returned the item without returning the interest. They'd need to report the imputed interest as income (since they stole it!), and you could report it as a loss (since they stole it from you!).
- jerf 6y agoSo... if hypothetically we ever went to negative interest rates, you could screw up somebody's taxes by stealing some item from them Jan 1st that doesn't depreciate, and returning it to them December 31st. Then report this action to the IRS, and the victim of the theft now owes the government because the negative interest you saved them by taking this asset off their hand and returning it to them December 31st is now income.
- saalweachter 6y agoI mean, we talk occasionally about the "negative interest rate" of owning gold, ie, the cost of securing it against theft. And you provided that service for free!
- StavrosK 6y ago...by stealing it. I love the irony.