Mark Kohler explains why a GoFundMe recipient got a 1099-K for donations toward his wife's cancer treatment. The money isn't taxable because it's gifts, not business income. The annual gift-tax exclusion is $15,000, so most donations don't trigger taxes on either side, but keep records to prove it to the IRS if they ask.
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Rami. This was a good one from Rami H. A friend received a 1099K. What's a 1099K? Well, a 1099K comes from transactions from merchant accounts. And so PayPal or Venmo, stuff like that. Apple Pay. And it was from a GoFundMe. Oh, for his wife that had cancer. Is that taxable? Now, the first answer is. And then he says, or Rami says, and how would you report it? Thanks, stud. Thank you. Little shout out for that. I appreciate it. A Friend received a 1099K Go fund me. Wife had cancer. Is it taxable? 1099Ks can be taxable, but in this situation, it was a GoFundMe to help his wife with cancer. There was no business transaction, so that was a gift. Now, this year, the gift exemption is $15,000. So if anybody gave them more than $15,000, they would have to file a gift tax return. Not the recipient, but the person that gave the money. But I knew GoFundMe. Typically people are given 100 bucks, 500 bucks, 200 bucks, whatever, $10. So all of that was gifts, non taxable. Now, I would keep good records. If the IRS comes knocking and says, you got a 1099k for 50 grand, what the hell happened? You're going to say it was a GoFundMe, wife had cancer, we're okay. So there's nowhere to report it. You don't have to report it. Keep good records. A 1099K for a GoFundMe would have been a gift in this situation.
