A friend is loaning me $13,000. He got a traveler's check and made out to me. If I deposit it to my bank (we both bank at chase), will I need to report that money on my taxes? Also, can I take half of it out as soon as I deposit it with out any problems?
You don't pay tax on a loan. I'm not sure how travelers' checks work but with regular checks the bank can hold onto the money for 2 or 3 days until the check clears.
The fed. govt. takes an interest in any transaction bigger than $5k. The bank has to fill out some kind of report, to make sure it's not drug money (though I have no idea how they would know that!) If it's all legitimate, though, I don't see how there would be a problem.
Loans are not taxable unless your friend forgives the loan; in which case it becomes a taxable gift. But certain gifts are exempt from tax anyways.
Chase should allow you immediate credit for a travelers check; but since Chase is a megabank, they like to rip off small depositors. They can put a 10 day hold on your deposit, even though it is unjustifiable.
No, you will not be taxed on getting or depositing the money.
Even if you wanted to report it, you are not allowed to report it.
However, if your friend decides not to make you pay back all of the loan, then your friend is supposed to report that, and you must pay tax on the part that you don't have to repay.
If it is a gift and not wages or income, then no. Your friend may possibly have to report and pay gift tax, but gifts are not taxable. However, the deposit is reported to the IRS and it's possible you may be contacted by them or audited to explain where it came from.
There is no place to report that on your tax forms, and you will not owe any taxes on it. If your friend was giving you more than $14000, your friend would owe gift tax. You would not owe anything. $14,000 or less is exempt from gift tax.
Call chase about the availability of the money. There are different factors involved.
Your loan will not be taxed. If it was a gift, it's still under the gift limit. The interest you pay (if any) can be deducted on your taxes and should be reported on his.
If it's a loan there should be no tax. It's not income.
You don't have to pay taxes on a loan
You don't pay taxes on loans, though you may have imputed interest problems if it's not a market-rate loan.
You won't get taxed. Either way the IRS will be notified about that deposit, if they aren't its an illegal transaction.