How to declare a loan on your income tax return

From Infomoney

Question: What is the correct way to declare an interest-free loan of money to a friend or relative? How does the lender report it, and how does the recipient report it? And when repaying the loan in the following tax year, how should one proceed to avoid violating the rules of the Internal Revenue Service?

Answer from Daniel Nogueira, IRPF specialist at Crowe Horwath: The lender must report all details related to the loan transaction in their "Assets and Rights" section, just as the borrower must report the details in a specific "Debts and Encumbrances" section.

When receiving loans, the taxpayer must "report, in the 'Description' field of the Statement of Assets and Rights, the loan amount, the name and taxpayer identification number (CPF) of the borrower, and the dates and amounts received for its settlement, even if the loan was granted and fully received in 2014. In the fields 'Situation on 12/31/2013 (R$)' and 'Situation on 12/31/2014 (R$)', report the balances on 12/31/2013 and 12/31/2014, respectively. The amount received must not only be proven through valid and appropriate documentation and the proper recording of the loan in the respective tax returns, but also be compatible with the income and financial resources declared by the lenders on the respective dates of delivery and receipt of the amounts."