Author Topic: IRS and investment documentation  (Read 404 times)

M

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IRS and investment documentation
« on: February 22, 2022, 05:22:57 PM »
Hello, Iíve searched for an answer with no luck so am hoping to find the answer here. In late 2006 I ďloanedĒ my uncle a chunk of money so he could take it along with his and another family memberís to invest in a real estate deal. It was a very informal business transaction (not recommended). I wasnít involved in business decisions. As you know things got rough shortly after that. They hung onto the property hoping it would recover. Needless to say finally there was an offer this winter and we decided to take it, with all of us sharing in the loss. There was a deposit into my bank account upon closing by the title company. Iím figuring I need to file a form with the IRS to show what that deposit was and also I want to do that so they can see there was a loss to help substantiate the max $3k/year Iíll be writing off over several years. What form would that be? Do I need to have my uncle file it with the IRS since he was dealing with the business transactions?

gocurrycracker

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Re: IRS and investment documentation
« Reply #1 on: February 22, 2022, 09:53:55 PM »
Form 8949, Sales and Other Dispositions of Capital Assets

This can be messy and I certainly don't grok all the nuance.

If you were an inactive owner of a rental property, determining your basis might involve some work and you may need to recapture some depreciation (even if you never deducted it.)

If you gave your uncle a loan with no interest and no payments... then you report the loss on the same form 8949
Technically you were supposed to charge interest and what "should have" been paid is taxable to you since 2006.