01-11-2013, 02:29 AM
Beyond echoing what was said above ...
The IRS will treat the difference between the going rate for a loan and your zero interest as a gift. If that's less than 10K/year, you're probably ok on that front. (I am not a lawyer or tax attorney, please check with a real one).
But, really, if this is a business investment, then treat it as such. Get a lawyer, draw up a contract. If your buddy pays it off, fine. If something unforeseen happens, you can write it off.
The IRS will treat the difference between the going rate for a loan and your zero interest as a gift. If that's less than 10K/year, you're probably ok on that front. (I am not a lawyer or tax attorney, please check with a real one).
But, really, if this is a business investment, then treat it as such. Get a lawyer, draw up a contract. If your buddy pays it off, fine. If something unforeseen happens, you can write it off.