Help a brother with student loans ? or not ?

[AIdoc]

My brother is about to get a loan for dental school for two years ( each year about 100k) ( this is kind of a pathway for foreign dental grads to get into US dental schools). I can help him with 50-60K a year that he offered to pay back over 4-5 year when he starts working ( not charging him interest off course). Do I get any tax benefit from doing that ? How much ? Is there an upper limit for the benefit/amount I can gift him ? Is this even a financially reasonable decision for me/him ?

Thanks in advance

[Side Hustle Scrubs]

I don’t know about the Fourth Turning, the Fifth Dimension or the Sixth Sense, but I do know I wouldn’t loan a family member 100k for something he can take out a loan for and pay back with the 6 figure career the degree will buy him.

Don’t loan money to family unless you are prepared to never get it back. It can only lead to trouble.

[hightower]

Classic "out in left field" post from Crixus.  Like a true trump supporter, he's scared to death of women in power, specifically "minority" women.  Oh the terror!  LOL

But yes Crixus, you are correct, the millennial generation is going to have their revenge.

[CordMcNally]

hightower wrote:

Classic “out in left field” post from Crixus.  Like a true trump supporter, he’s scared to death of women in power, specifically “minority” women.  Oh the terror!  LOL

But yes Crixus, you are correct, the millennial generation is going to have their revenge.

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I'll let Crixus defend himself but I don't think he's scared of women, or minority women in power, and I think there's many (potentially false) assumptions in your statement. I think it's her platform that is scary to people. I will say, I do agree with Crixus on his suggestion on not lending the money.

[artemis]

Side Hustle Scrubs wrote:

Don’t loan money to family unless you are prepared to never get it back. It can only lead to trouble.

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^^^This is wise advice to live by.  Fights over money are one of the most common things that destroy families.  OP, if you want to help your brother, do it with no expectations of repayment - that way if he does repay you it's a happy surprise, and if he doesn't your relationship with him won't be soured.

[ENT Doc]

He said millennials and referenced an example of a wild socialist who happens to be a woman and minority. The same argument would hold true if it were a white male with similarly asinine beliefs such as abolishing profit. His criticism of those ideals is warranted. The only one viewing things through the lens of sex and race appears to be you.

[nolamd84]

Don't loan to family. Gift it if you want to help but otherwise let them figure it out.

[AIdoc]

Thanks for the input but is there a real tax benefit from writing a gift (check) for tuition ? Is there a limit for that ?

[CordMcNally]

AIdoc wrote:

Thanks for the input but is there a real tax benefit from writing a gift (check) for tuition ? Is there a limit for that ?

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There's no tax benefit to you. Usually, the giver would be responsible for the taxes, not the recipient. However, gifts for tuition are tax free. I guess the benefit is that you wouldn't owe any taxes. Here is the IRS page covering this: IRS: Gift Taxes

[The White Coat Investor]

You can gift $15K a year. You can also loan the money and "gift" up to $15K a year in interest. But if you loan him money, there is a minimum interest rate he must pay:

http://bza.me/?54BR36

Whether this is a wise thing to do or not, I'll leave up to you, but you might read this post before making a decision:

https://www.whitecoatinvestor.com/building-wealth-across-the-generations/

[AlexxT]

When you lend a friend money, you lose a friend.   With a relative it's worse.  Don't do this.

I have seen this play out in real life.  Before we were married, my wife lent her best friend $5,000.  Then her friend never spoke to her again.  It was unnecessary, since my wife didn't really need or want the money back.

Also, you need to understand opportunity costs.  You will be losing around 7% a year, compounded, which you would have earned if you had invested the money yourself.  You would be better off keeping the 100k, investing it yourself, and sending your brother a check for the interest on his loan each year as a gift.   It comes out to the same cost, but this way you don't have to worry about not being paid back.

Better option:  Let him take out his own loans.  If he needs help someday and you're willing to give it to him, deal with it then.  For now, let him take care of himself.

As others noted, there's no tax benefit to you in doing the loan, but the interest he wouldn't pay would be a gift, potentially subject to gift taxes.

[hightower]

CordMcNally wrote:

hightower wrote:

Classic “out in left field” post from Crixus.  Like a true trump supporter, he’s scared to death of women in power, specifically “minority” women.  Oh the terror!  LOL

But yes Crixus, you are correct, the millennial generation is going to have their revenge.

Click to expand…

I’ll let Crixus defend himself but I don’t think he’s scared of women, or minority women in power, and I think there’s many (potentially false) assumptions in your statement. I think it’s her platform that is scary to people. I will say, I do agree with Crixus on his suggestion on not lending the money.

Click to expand...

ENT Doc wrote:

He said millennials and referenced an example of a wild socialist who happens to be a woman and minority. The same argument would hold true if it were a white male with similarly asinine beliefs such as abolishing profit. His criticism of those ideals is warranted. The only one viewing things through the lens of sex and race appears to be you.

Click to expand...

Yes, unjustified fear.  She's a democratic socialist, not a communist.  Universal healthcare is the type of scary, wild idea she is promoting.  Hardly a wild socialist.  We're talking about things that people all over the world already enjoy.  Meanwhile we spend a significant amount of our freedom worrying about how we're going to pay for healthcare when we're not able to work anymore, for example.

But, the fact she is a minority and a female scares a lot of people too.  Don't fool yourself into believing that's not true.  It may not be true for you, I don't know if it's really true for Crixus, but it's definitely true for a lot of typical trump supporters.  I know a lot of them, I grew up with them, I still live around them, I have to take care of them in the hospital and hear them say blatantly racist BS under their breath while watching fox news on the TV in their rooms.  They fear minorities and they see women as incapable of strong leadership.  Don't forget that the civil rights movement was only 50-60 years ago.  The opposition to that movement and their children are still alive and well in this country.  And they all voted for trump.  That's who I'm referring to.  I lump crixus in with that group because he sounds like one of them with his irrational fear of just about everything and his open support for the idiot in the white house.  I don't think he really cares what I or anyone else thinks of him, that's why I comment the way I do on his posts.

[The White Coat Investor]

I've got an idea. Let's take an entirely reasonable question and use that thread to discuss politics! That'll make for a friendly atmosphere in the forum and help us to increase financial literacy among physicians.

If you want to discuss the interactions of politics and physician finances, go to the lounge. If you just want to argue about politics, go somewhere else.

This one is closed as the question has been answered and it is starting to generate more heat than light.