Q: Converting loan interest payments into charitable contrib

[thill at jewishjustice.or]

Dear Colleagues,

I was wondering how loan funds which pay interest to their investors handle this common situation:* An investor makes a loan that bears interest to the loan fund, for which they receive a 1099 each year.* That investor wants to convert that interest payment to a charitable contribution (and get the tax deduction).

Are there better, more "seamless" options than either:
Asking the investor to lower the rate to 0% so that they don't have to pay taxes on interest, and then have them write a separate check for the contribution; or Sending them the 1099, and asking them to write a separate check for the contribution (so they pay taxes and get a tax deduction)?Do folks have an easier process to recommend?

Thanks very much,

-Tom

--
Tom Hill
"Tzedec Loan Fund Associate
Jewish Funds for Justice (JFSJ)
8459 Ridge Avenue, 2nd Floor
Philadelphia, PA 19128

phone: 215-483-4004 x 218
fax: 215-483-4429
www.jewishjustice.org (http://www.jewishjustice.org) & www.jspot.org (http://www.jspot.org)

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