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Updated over 5 years ago on . Most recent reply
Tax Liability for Private Money Lending
Is an out of state private money lender taxed twice on the interest income? If so, what are some ways around that. I have someone who is interested in investing in one of my projects who lives in Illinois and I am in Georgia. He was told he would be taxed twice and therefore doesn't feel it would be a worthwhile investment. I don't believe he's lending out of an IRA or 401k but could very well deposit proceeds in to one of those account types. Please advise.
Most Popular Reply
Loan from an Ira and you won’t be taxed in either state or federally. You May be taxed when you withdraw it by the feds and possibly the state you live in -if it isn’t a Roth.
If it’s a Roth you will never be taxed.