Taxes on Interest Income from Personal Loans

[vaylie]

This isn't a thread about the upsides/downsides of making a personal loan. I'm more interested in the tax filing aspects.

Let's say I lend out 50k now, set an interest rate at 5%, and say that for the first 6 months, no interest needs to be paid, and it only starts accruing after that. Is this something I can do? Do I need to file imputed interest on those 6 months?

I read that there are exceptions like for businesses that do 0% intro APR deals which is pretty similar to what I've got planned but I'm not a business, just a private person. Curious if this still applies?

[BogleTaxPro]

This isn't a thread about the upsides/downsides of making a personal loan. I'm more interested in the tax filing aspects.

Let's say I lend out 50k now, set an interest rate at 5%, and say that for the first 6 months, no interest needs to be paid, and it only starts accruing after that. Is this something I can do? Do I need to file imputed interest on those 6 months?

I read that there are exceptions like for businesses that do 0% intro APR deals which is pretty similar to what I've got planned but I'm not a business, just a private person. Curious if this still applies?

As a private person, you use cash basis accounting. Which means, you declare the income when you actually receive it.

[Rex66]

If I’m not mistaken though it has to be reasonable meaning you can’t avoid interest indefinitely.