Taxpayer T would like to "shift" some of his current year taxable income to an elderly aunt.T can accomplish this objective through the use of a $150,000 interest-free demand loan to his aunt.

Question

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This is not a legitimate way to shift taxable income and could be considered tax evasion. The IRS would likely view this as a gift to the aunt, which may trigger gift tax consequences for T. Additionally, the IRS would likely impute interest on the loan, meaning T would have to pay taxes on the interest he should have received but did not charge.

Taxpayer T Would Like to "Shift" Some of His Current