I am lending $ to my cousin in other country via wire transfer.Will this trigger possible tax issue with IRS?

Question

I am lending $$ to my cousin in other country via wire transfer.Will this trigger possible tax issue with IRS?

Answer 1

No, as long as you report interest income on your tax retrun.

Also you should read this

If you had any financial interest in, or signature authority or other authority over one or more financial accounts in a foreign country, you may have to complete Treasury Department Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, and file it with the Department of the Treasury.

Read: http://mytaxes.in/index.php?topic=1.0

Answer 2

was your money you wired already taxed? The one thing to keep in mind is the sum to be wired. Over a certain amount it is reported to Homeland Security and after they check everything out would probably dis-regard the issue unless something look fishy as far as employee earnings vs. amount being wired.

Answer 3

Probably not...but do remember to declare the interest income on your tax return.

While you don't have to charge your cousin interest, you must recognize the interest regardless.  Use AFR as your search word to get the current interest rates...See IRS publication 550 for more details on gift loans.