Posted by Dave T on September 10, 2002 at 15:10:40:
Generally speaking, borrowed money that must be repaid is not taxable income.
In your example, your $50K loan is not taxable income. The fact that you did not apply the entire loan balance to your purchase, does not create a taxable event.
Same thing applies to a home equity loan. Borrowing $20K against the equity in your primary residence is not a taxable event, regardless of how you spend the money.