 TITLE: Do You Have to Pay Income Taxes on Personal Loans? CONTENT: Are Personal Loans Treated as Taxable Income?\n---------------------------------------------\nPersonal loans generally aren't taxable because the money you receive isn't income. Unlike wages or investment earnings, which you earn and keep, you need to repay the money you borrow.\nBecause they're not a source of income, you don't need to report the personal loans you take out on your income tax return. This is true whether a bank, credit union, peer-to-peer lender or another financial institution lent you the money.\nIf you receive a personal loan from a friend or family member, there may be other tax implications, but the money still won't be taxable income for you. For example, if the loan has no interest or a below-market interest rate, as determined by the current \"applicable federal rate,\" the IRS may consider it a gift rather than a loan.\nWhen a gift is for more than the gift tax exclusion for the year—$15,000 in 2020—the person who gives you the money may have to file an extra form (IRS Form 709). But, even then, you don't need to report receiving the gift. And, the gift giver won't pay any gift taxes unless they've given away more than the lifetime gift tax exemption—which was $11.58 million as of 2020. END