I was blessed to have money gifted to me from my parents from their LOC (line of credit). The LOC comes with a monthly payment which I am looking to pay so I get that tax benefit. I'm looking for advice on the best way to show payment on this loan so I can deduct for taxes. I currently have an S corp and would like to pay that payment through the business. Would it be better to pay it back directly to my parents? Or to pay the lender directly?
First thing to remember about tax law is it is not a gift if there is an expectation of repayment.
Your parents should have structured a loan to you. If their LOC charges them 5% interest, then they can charge you the same and treat it as a loan.
Speak to your CPA for more details.