<prompt> Human: Hello rpersonalfinanceLong-time lurker here. You guys give some great advice from which Ive benefited tons from, and now Im hoping for a little bit more advice.My wife 58F and I 60M are both working solid jobs, and though weve got an eye on retirement, we both intend to work at least through 65. Weve made a good life for each other and our combined income is 200k. Our house is nearly paid off and we have a decent amount tucked away in savings and retirementOur son is 28 and will be starting his MBA at Duke. Weve always intended to help fund his graduate study, but now that we need to start disbursing money, we wanted to make sure were doing things properly. Hes always worked hard were extremely proud of his work ethic and were not too concerned with his post-graduate prospects he intends to pursue management consulting or banking. We originally intended on gifting him the entire amount 180k, but he came back to us with a proposal to take the entirety as a loan and to pay us back with interest son proposed 4.5 over 10 yrs. His reasoning is this would be a benefit for my wife and me, and he would also benefit since our loan would be cheaper than what he could get through the govt or a bank.My initial areas of concern:a Is it correct to assume we would have to report the interest as income and owe taxes on the income?b For federalprivate bank education loans, my son would be able to write off the interest payments. Would he be able to do so for a loan that his mom and I make to him? Solved. Thanks utakeandbake!c What kind of paperwork do I need to give him at the time of making the loan, and on an annual basis?My wife is all in on the plan, but Im a little wary I absolutely trust my son, but Ive never done something like this. Is there anything glaring I should be thinking about?Thanks reddit!Assistant: You were initially planning on gifting him the money, but now you are willing to take him to court after he proposed paying you back with interest? Seems a bit odd.Human: Posted in a separate comment:TBH, my wife and I were not fully aware of the tax implications of gifting the entire amount. My son had voluntarily come back with the loan proposal as a way to repay us for our financialemotionalparentaletc support.Like I said, I fully trust my son, but it seems a lot of posters here think thats a bit naive risky which I understand.Assistant: There are no tax implications of giving it as a gift as long as you dont plan on giving your son more than 5 million in your lifetime. You arent really addressing the question though. If you had already budgeted to give away 180k, then why would you really care if he doesnt pay you back. It would be a shitty thing of your son to do if he said he would pay you back, but it wouldnt be any worse off than if you had gifted the money.Human: I think I may have not been clear enough, and I apologize for that. Youre right, if we ended up giving the money as a loan and our son doesnt pay us back, it would be an incredibly shitty thing of him to do, but we wouldnt be any worse off than if we had gifted the money. It just feels accepting his offer to take a loan changes the dynamic. Or maybe Im just overthinking this.  <response>: Yes it obviously changes the dynamic, just like sueing your son would change the dynamic of your relationship with him. I think the general advice is to treat money you loan friends and family as a gift. Any money you get paid back is just a bonus. It just seems silly to me to delve into paperwork and collateral etc. on money that you were already planning on gifting. 