Free US family money tool

Gift vs Loan Calculator

Work through the practical and federal-tax differences between giving money and lending it. Clarify whether repayment is genuinely expected before money changes hands.

Compare gift vs loan ↓

Answer first

Is money for family a gift or a loan?

It is a gift when there is no genuine expectation of repayment. It is a loan when repayment is expected, even if the rate is 0%. Written terms and the parties’ conduct help show what was intended.

Gift or loan? Money to family is one or the other, and the difference matters: a gift cannot be asked back and counts toward gifting limits, while a loan needs a written agreement and a repayment record to count as one. Compare both for your amount, then create a signed loan agreement with Chipkie.

How to use it

Work through the decision in three steps

1
Choose the real intention
Decide whether the money is meant to come back.
2
Review the tax questions
Compare gift reporting with the below-market-loan and imputed-interest context.
3
Use the matching structure
Record a genuine gift appropriately, or create clear loan terms and a repayment plan.

Useful context

US tax treatment follows the real arrangement

The IRS treats gifts and below-market loans differently. A gift can raise gift-tax reporting questions, while a below-market loan can create imputed interest. This calculator provides general context rather than a personal tax result.

Gift vs loan FAQs — United States

What is the difference between a gift and a loan?

A gift has no genuine expectation of repayment. A loan does, even when its agreed interest rate is 0%.

Can I give money to family without charging interest?

A genuine gift has no interest because it is not repaid. A 0% loan is different and can raise federal below-market-loan questions.

Is an interest-free family loan still a loan?

Yes, when the principal is genuinely expected to be repaid. Federal tax rules may still impute interest.

Should a family loan be in writing?

Written terms, a repayment schedule and payment records help show that the parties intended a loan rather than a gift.

Does a gift always require a gift-tax return?

No. Reporting depends on the amount, recipient, available exclusions and other facts. Check current IRS guidance for the year of the gift.

Does the $10,000 exception apply to a fixed-term family loan?

IRS Publication 550 states that the $10,000 exception does not apply to term loans.

Decided it is a loan?

Turn the decision into a clear repayment plan and track it for free in Chipkie.

Create a loan →