Private lending tax issues if using a line of credit

[Fernando Cardona]

I have been reading a book called the bankers code 

It talks about becoming the bank and using lines of credit from a bank to then do private lending.

If anyone is actually doing this and could give me some input about the tax implications.

Private lending tax implications when using line of credit. Suppose you lend at 10% and use a line of credit from a bank at 6%. Regarding the tax implications would you be subject to paying the difference in taxes. Say 4%?  Or would you be subject to taxes on the whole 10%?

Also tax implications in general on private lending, recommendations on how to keep track the amount to pay on taxes.

Any help is much appreciated.

[Roy N.]

Things are perhaps different on your side of the 49th, but why would borrowing money to "invest" in private loans be any different (from a tax perspective) than borrowing to "invest" in any other {legal} vehicle (stocks, bonds, real estate)?

If your capital cost is 6% and you return 10%, than your net revenue will be 4%.  From this you would deduct your allowable operating costs (legal, administrative, servicing, etc) and the remainder would be your net income.