Taxes on Private/Hard money loans?

[Ronny Crawford]

Does anyone have professional guidance regarding how taxes work regarding private lenders or hard money lenders?  I was on both sides of this question last year and have not yet filed my taxes.

Two scenarios to consider:

1.  I borrowed $100,000 @ 8% for 12 months, ending April 2017.  I've paid this in full when I sold the property.  Is the full $108,000 a deductible expense on the Flip?  Is there any required documents I'll need to provide my accountant?

2. I loaned $40,000 to another investor at 20% interest.  I was in 2nd position and they were desperate...  I received full payment in September 2017.  Do I have to claim the $8,000?  If so, how do I report it?  Ordinary income? Capital Gains?  What documents will I need to provide, if any, to my accountant?

Thanks in advance!

Ronny