Earlier this year, I purchased a house and, though I had the funds, my parent insisted to support financially. We have a very good relationship and they expect no payment or strings attached in return (truly). However, I want to treat it as a family loan so that I don’t have to pay taxes on that amount since it’s over the $15,000 tax free gift amount (I live in the US).
I’ve heard a way to document the family loan is via a promissory note. Is that the best way?
Are there recommendations for a good promissory note template?
What terms do I need to be aware of setting with the note and what kind of interest needs to be paid back with it?
How should this transaction get reported on my taxes? I live in the US.