international tax-law
Do you have to pay tax on money received after a friend/family repays money you lent them?
<p>So if I lend a friend/family like 5k$, do I have to pay tax on that money when my friend/family pays it back to me?</p>
<p>A more concrete example: my brother in the USA would send us let's say 5k$ for some stuff. He's in the USA and we're in another country (Romania). After we send the 5k$ back, will he have to pay tax back on it?</p>
<p>We're talking about bank to bank transactions.</p>

<p>If one person lends money to another, that is a loan, even if there is no formal written agreement. Loan repayments are not taxable income under US federal income tax law (I can't speak for whether they might be in some other country).</p>
<p>Interest on a loan is taxable income, if any interest is payed.</p>
<p>However, the recipient might be challenged as to whether it is an actual loan repayment or a payment for some other purpose by the tax authorities.</p>

<p>Repayment of the principal of a loan is not taxable income under U.S. tax law.</p>
