Parents who give their child an interest-free loan are required to declare interest income at the applicable federal rate if the loan is more than

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The current annual gift tax exclusion is $15,000 per person. If a parent loans a child more than $15,000 interest-free, it is considered a gift and would exceed the annual exclusion. Therefore, the parent must declare interest income at the applicable federal rate.

Parents Who Give Their Child an Interest-Free Loan Are Required