Family Business Loan Tax implications?

[Thomas Lee]

Hi all,

I have a couple of questions regarding money borrowed from a family member.

First I'm fortunate enough to be having a mother in law who is going to lend me roughly 60K in the next month or so to expand my real estate portfolio.

My questions are:

1. How do i avoid paying a gift tax on this money. I'm guessing if we sign a promissory note and I pay her interest that I would successfully avoid the tax.

2. Since i'm using the funds for business purposes I should be able to deduct the interest I pay correct?

3. Will she have to claim the interest as income?

I was going to create a loan contract on either rocket lawyer or legal zoom and have it be secured by the home i live in to make everything legit with the IRS.

Any other issues anyone else can see i could run into with this setup.

Thanks in advance.