Came across an interesting article on CNNMoney, that talked about the fact that if you lend money to anybody at below a certain rate, then you could be assessed the difference as part of your income tax.
The minimum rate that you need to lend money at is determined by the Applicable Federal Rates (AFR). The rates are published monthly at http://www.irs.gov/app/picklist/list/federalRates.html
There are 3 sets of rates – short-term (under 3 years), mid-term (3 to 9 years) and long-term (beyond 9 years).
And here is the CNN Money article where I first came across this information: http://money.cnn.com/2009/09/14/pf/expert/family_lending.moneymag/index.htm?postversion=2009091505