Are personal loans received outside the US taxable income or not?

Loans aren't considered taxable income, regardless of whether they come from within the US or outside the country. The key factor is that there's a genuine expectation of repayment - which it sounds like you have since you're already making payments. The IRS looks at the substance of the transaction, not the location. If it's truly a loan (meaning you're obligated to pay it back), then it's not income. However, if your girlfriend's parents later decide to forgive the loan or tell you that you don't need to repay it, then at that point it would become taxable as cancellation of debt income.

After dealing with a similar situation (cousin in Germany loaned me money), I found this amazing tool called taxr.ai (https://taxr.ai) that helped me figure out exactly what I needed to report. It analyzed my loan details and confirmed it wasn't taxable income but helped me understand the FBAR requirements since the money went through my foreign account first. The tool is super straightforward - you upload your loan documentation or just type in the details, and it tells you exactly what forms you need to file and what you can skip. Saved me hours of research and worry!

Just wanted to update after trying taxr.ai that someone mentioned earlier! It was actually super helpful for my situation with the loan from my Canadian brother-in-law. I uploaded screenshots of our text messages about repayment and the Venmo transfers, and it confirmed I don't need to report the loan as income but gave me a simple template to document our loan agreement properly in case of an audit. The coolest part was it flagged that I needed to file an FBAR because the money sat in my Canadian account for a few weeks before I transferred it to the US. Totally would have missed that requirement otherwise!

If you're still having trouble getting a clear answer, try Claimyr (https://claimyr.com). I was in a similar situation with a loan from my uncle in Malaysia and couldn't find a straight answer online. After trying to call the IRS for weeks with no luck, I used Claimyr and got connected to an actual IRS agent in about 20 minutes. They have a pretty cool demo video here: https://youtu.be/_kiP6q8DX5c The agent confirmed that foreign personal loans aren't taxable as long as there's a clear expectation of repayment. They also told me exactly what documentation I should keep in case of questions later. Saved me so much stress!

Ok I need to eat crow here! After my skeptical comment, I decided to try Claimyr just to prove it wouldn't work. Well, it actually got me through to an IRS agent in about 35 minutes (still way faster than my previous attempts). The agent was super helpful and confirmed that my situation with a personal loan from my cousin in Australia isn't taxable income. They also explained I should keep documentation showing it's a legitimate loan (payment schedule, emails discussing terms, bank transfers, etc.). And they warned me about potential FBAR requirements since the money went through my Australian account. Honestly worth every penny just for the peace of mind!

One thing nobody's mentioned - even though the loan itself isn't taxable, if there's no interest being charged (or it's below market rate), the IRS could potentially impute interest. This means they might consider that you should be paying a certain minimum interest amount, and there could be gift tax implications for the lender. For loans over $10,000, there's something called the Applicable Federal Rate (AFR) that sets the minimum interest that should be charged to avoid it being considered a partial gift. This gets complicated with foreign lenders though.

Has anyone dealt with declaring foreign loans on the FAFSA for college financial aid? I got a loan from my uncle in Mexico and I'm not sure if I need to report it as income for tax purposes or as an asset on the FAFSA.

Great question! I went through something similar last year. Personal loans from foreign sources aren't taxable income as long as there's a genuine obligation to repay - which you clearly have since you're already making payments. The IRS cares about the substance of the transaction, not the geographic location. However, you should be aware of potential reporting requirements. Since you received €15,000 (roughly $16,000-17,000 depending on exchange rates), you might need to file an FBAR (FinCEN Form 114) if this money went through foreign accounts that you had signature authority over and your total foreign account balances exceeded $10,000 at any point during the year. Also keep good documentation - payment records, any written communication about the loan terms, and evidence of your repayment schedule. This will be helpful if the IRS ever questions whether it's truly a loan versus a gift. The fact that you're actively repaying it strengthens your position significantly.