Loan from family - tax implications

[Jamie Gruber]

My wife and I own a few properties and are looking to renovate one of them. My parents have a home equity line that they are looking to get a return on. If they write my LLC a check for $50k as a loan for renovations, I believe the tax implications for me would be positive in that I can write off the interest paid back to my parents (based on terms we’ve discussed). And for my parents, they’d need to claim the interest I paid them as income. So I’d have to issue a 1099 to them with the amount of interest paid. Am I missing any negative tax possibilities for either of us? I’m mostly concerned about a negative impact for my parents. Any thoughts or advice are appreciated.