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let's say someone wishes to loan money to his brother, but has little expectation of repayment and no intention of pursuing the matter if his brother defaults. would the irs consider this a gift, a loan, or a gift loan?

details: 14k$ at 12% interest for a fixed term of 3 years as a strictly oral agreement without any signed document. let's assume there are some emails or text messages discussing the issue, but nothing documenting a final agreement.

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this article seems to imply it would be considered a gift since the lender does not intend to enforce the debt.

The IRS starts with the presumption that a transfer between family members is a gift. You can get around that presumption by showing that you really expected repayment and intended to enforce the debt.

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