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VinnyB
Aug 11, 2016, 4:15:38 PM8/11/16
to
I've noticed a lot of people using the GoFundMe site to raise money
for various purposes. I've always assumed that _unless_ the entity
soliciting the donations is a recognized charitable organization, that
the solicitor can expect some type of 1099 the following year. Just
curious, is that a reasonable assumption?
Does the IRS require GoFundMe to withhold some percentage? If not,
I'm guessing a lot of people can find themselves in a bind.
--
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for various purposes. I've always assumed that _unless_ the entity
soliciting the donations is a recognized charitable organization, that
the solicitor can expect some type of 1099 the following year. Just
curious, is that a reasonable assumption?
Does the IRS require GoFundMe to withhold some percentage? If not,
I'm guessing a lot of people can find themselves in a bind.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
ira smilovitz
Aug 11, 2016, 10:44:21 PM8/11/16
to
On Thursday, August 11, 2016 at 4:15:38 PM UTC-4, VinnyB wrote:
> I've noticed a lot of people using the GoFundMe site to raise money
> for various purposes. I've always assumed that _unless_ the entity
> soliciting the donations is a recognized charitable organization, that
> the solicitor can expect some type of 1099 the following year. Just
> curious, is that a reasonable assumption?
>
> Does the IRS require GoFundMe to withhold some percentage? If not,
> I'm guessing a lot of people can find themselves in a bind.
>
> --
Not at all. 1099s are only issued by businesses not individuals, so there isn't likely to be any 1099 reporting to a GoFundMe recipient. The receipts may or may not be taxable depending on the nature of the GoFundMe campaign. If the recipient provides anything (goods or service) in return for the contribution, then the receipt is taxable income. If nothing is provided (such as a campaign to raise money for a family in need) then the funds are tax-free to the recipient, but possibly subject to gift tax for the donor.
> I've noticed a lot of people using the GoFundMe site to raise money
> for various purposes. I've always assumed that _unless_ the entity
> soliciting the donations is a recognized charitable organization, that
> the solicitor can expect some type of 1099 the following year. Just
> curious, is that a reasonable assumption?
>
> Does the IRS require GoFundMe to withhold some percentage? If not,
> I'm guessing a lot of people can find themselves in a bind.
>
> --
Ira Smilovitz, EA
VinnyB
Aug 12, 2016, 11:16:16 AM8/12/16
to
On Thu, 11 Aug 2016 22:42:03 EDT, ira smilovitz
<ira.sm...@gmail.com> wrote in
<c3261d49-382f-4f03...@googlegroups.com>
>On Thursday, August 11, 2016 at 4:15:38 PM UTC-4, VinnyB wrote:
>> I've noticed a lot of people using the GoFundMe site to raise money
>> for various purposes. I've always assumed that _unless_ the entity
>> soliciting the donations is a recognized charitable organization, that
>> the solicitor can expect some type of 1099 the following year. Just
>> curious, is that a reasonable assumption?
>>
>> Does the IRS require GoFundMe to withhold some percentage? If not,
>> I'm guessing a lot of people can find themselves in a bind.
>>
>> --
>
>Not at all. 1099s are only issued by businesses not individuals, so there isn't likely to be any 1099 reporting to a GoFundMe recipient. The receipts may or may not be taxable depending on the nature of the GoFundMe campaign. If the recipient provides anything (goods or service) in return for the contribution, then the receipt is taxable income. If nothing is provided (such as a campaign to raise money for a family in need) then the funds are tax-free to the recipient, but possibly subject to gift tax for the donor.
>
>Ira Smilovitz, EA
I see. So the analogy is similar to the giving and receiving of
gifts? However if the gift solicitation involves a lot of work, (i.e.
paperwork, account setup, etc.) does that constitute what the IRS
would consider a work-effort made to solicit the donation?
I've read a number of those GoGundMe solicitations and they seem to
involve a lot of planning, thought and work to be effective. In my
mind that is a substatial work effort provided to solicit gifts and
thought it might be taxable to the solicitor.
Am I way off base here?
<ira.sm...@gmail.com> wrote in
<c3261d49-382f-4f03...@googlegroups.com>
>On Thursday, August 11, 2016 at 4:15:38 PM UTC-4, VinnyB wrote:
>> I've noticed a lot of people using the GoFundMe site to raise money
>> for various purposes. I've always assumed that _unless_ the entity
>> soliciting the donations is a recognized charitable organization, that
>> the solicitor can expect some type of 1099 the following year. Just
>> curious, is that a reasonable assumption?
>>
>> Does the IRS require GoFundMe to withhold some percentage? If not,
>> I'm guessing a lot of people can find themselves in a bind.
>>
>> --
>
>Not at all. 1099s are only issued by businesses not individuals, so there isn't likely to be any 1099 reporting to a GoFundMe recipient. The receipts may or may not be taxable depending on the nature of the GoFundMe campaign. If the recipient provides anything (goods or service) in return for the contribution, then the receipt is taxable income. If nothing is provided (such as a campaign to raise money for a family in need) then the funds are tax-free to the recipient, but possibly subject to gift tax for the donor.
>
>Ira Smilovitz, EA
gifts? However if the gift solicitation involves a lot of work, (i.e.
paperwork, account setup, etc.) does that constitute what the IRS
would consider a work-effort made to solicit the donation?
I've read a number of those GoGundMe solicitations and they seem to
involve a lot of planning, thought and work to be effective. In my
mind that is a substatial work effort provided to solicit gifts and
thought it might be taxable to the solicitor.
Am I way off base here?
ira smilovitz
Aug 12, 2016, 12:41:48 PM8/12/16
to
Ira Smilovitz, EA
Stuart Bronstein
Aug 13, 2016, 3:18:03 PM8/13/16
to
ira smilovitz <ira.sm...@gmail.com> wrote:
> VinnyB wrote:
>> ira smilovitz
>> <ira.sm...@gmail.com> wrote
solicit gifts (or not gifts) - the website doesn't actually run
anything, so it wouldn't be responsible fot 1099's even if they were
required.
Also, small nonprofits are not required to register with the IRS.
Contributions may not be deductible, but the organizaition may not be
required to pay tax on income related to a nonprofit purpose.
--
Stu
http://DownToEarthLawyer.com
https://www.etsy.com/shop/studiobethdesigns
> VinnyB wrote:
>> ira smilovitz
>> <ira.sm...@gmail.com> wrote
>> > VinnyB wrote:
>> >> I've noticed a lot of people using the GoFundMe site to raise
>> >> money for various purposes. I've always assumed that _unless_
>> >> the entity soliciting the donations is a recognized charitable
>> >> organization, that the solicitor can expect some type of 1099
>> >> the following year. Just curious, is that a reasonable
>> >> assumption?
>> >>
>> >> Does the IRS require GoFundMe to withhold some percentage? If
>> >> not, I'm guessing a lot of people can find themselves in a
>> >> bind.
>> >
>> >> I've noticed a lot of people using the GoFundMe site to raise
>> >> money for various purposes. I've always assumed that _unless_
>> >> the entity soliciting the donations is a recognized charitable
>> >> organization, that the solicitor can expect some type of 1099
>> >> the following year. Just curious, is that a reasonable
>> >> assumption?
>> >>
>> >> Does the IRS require GoFundMe to withhold some percentage? If
>> >> not, I'm guessing a lot of people can find themselves in a
>> >> bind.
>> >
>> >Not at all. 1099s are only issued by businesses not individuals,
>> >so there isn't likely to be any 1099 reporting to a GoFundMe
>> >recipient. The receipts may or may not be taxable depending on
>> >the nature of the GoFundMe campaign. If the recipient provides
>> >anything (goods or service) in return for the contribution, then
>> >the receipt is taxable income. If nothing is provided (such as a
>> >campaign to raise money for a family in need) then the funds are
>> >tax-free to the recipient, but possibly subject to gift tax for
>> >the donor.
>
>> >so there isn't likely to be any 1099 reporting to a GoFundMe
>> >recipient. The receipts may or may not be taxable depending on
>> >the nature of the GoFundMe campaign. If the recipient provides
>> >anything (goods or service) in return for the contribution, then
>> >the receipt is taxable income. If nothing is provided (such as a
>> >campaign to raise money for a family in need) then the funds are
>> >tax-free to the recipient, but possibly subject to gift tax for
>> >the donor.
>
> The work involved in setting up the GoFundMe campaign is
> irrelevant. What matters is whether the donors are receiving
> anything in exchange for the money they contribute.
Right. It looks like GoFundMe is just a platform for others to
> irrelevant. What matters is whether the donors are receiving
> anything in exchange for the money they contribute.
solicit gifts (or not gifts) - the website doesn't actually run
anything, so it wouldn't be responsible fot 1099's even if they were
required.
Also, small nonprofits are not required to register with the IRS.
Contributions may not be deductible, but the organizaition may not be
required to pay tax on income related to a nonprofit purpose.
--
Stu
http://DownToEarthLawyer.com
https://www.etsy.com/shop/studiobethdesigns
MTW
Aug 13, 2016, 4:44:03 PM8/13/16
to
On Friday, August 12, 2016 at 8:16:16 AM UTC-7, VinnyB wrote:
> I see. So the analogy is similar to the giving and receiving of
> gifts? However if the gift solicitation involves a lot of work, (i.e.
> paperwork, account setup, etc.) does that constitute what the IRS
> would consider a work-effort made to solicit the donation?
>
> I've read a number of those GoGundMe solicitations and they seem to
> involve a lot of planning, thought and work to be effective. In my
> mind that is a substatial work effort provided to solicit gifts and
> thought it might be taxable to the solicitor.
>
> Am I way off base here?
You MIGHT be onto something. For example, I remember Tax Court cases holding that panhandling income was subject to tax (and possibly SE) where the activity was "regular and continuous" and constituted the taxpayer's principal means of support.
> I see. So the analogy is similar to the giving and receiving of
> gifts? However if the gift solicitation involves a lot of work, (i.e.
> paperwork, account setup, etc.) does that constitute what the IRS
> would consider a work-effort made to solicit the donation?
>
> I've read a number of those GoGundMe solicitations and they seem to
> involve a lot of planning, thought and work to be effective. In my
> mind that is a substatial work effort provided to solicit gifts and
> thought it might be taxable to the solicitor.
>
> Am I way off base here?
So if a GoFundMe solicitation rose to that level of effort, I would expect similar tax results. The fact that donors receive nothing in return is not absolutely dispositive of the matter in my opinion.
Stuart Bronstein
Aug 14, 2016, 2:17:44 PM8/14/16
to
MTW <mtwi...@yahoo.com> wrote:
> You MIGHT be onto something. For example, I remember Tax Court
> cases holding that panhandling income was subject to tax (and
> possibly SE) where the activity was "regular and continuous" and
> constituted the taxpayer's principal means of support.
>
> So if a GoFundMe solicitation rose to that level of effort, I
> would expect similar tax results. The fact that donors receive
> nothing in return is not absolutely dispositive of the matter in
> my opinion.
The difference is that you can't be the non-profit purpose of your
> You MIGHT be onto something. For example, I remember Tax Court
> cases holding that panhandling income was subject to tax (and
> possibly SE) where the activity was "regular and continuous" and
> constituted the taxpayer's principal means of support.
>
> So if a GoFundMe solicitation rose to that level of effort, I
> would expect similar tax results. The fact that donors receive
> nothing in return is not absolutely dispositive of the matter in
> my opinion.
own nonprofit organization. If someone receives money for a purpose
that does not qualify as nonprofit, and the donor does not get an
equity position in the company in return, then to the recipient it
would be taxable income.
And if it's more than $14,000 it could also require a gift tax
return.
Taxed and Spent
Aug 14, 2016, 3:23:38 PM8/14/16
to
On 8/14/2016 11:17 AM, Stuart Bronstein wrote:
> MTW <mtwi...@yahoo.com> wrote:
>
>> You MIGHT be onto something. For example, I remember Tax Court
>> cases holding that panhandling income was subject to tax (and
>> possibly SE) where the activity was "regular and continuous" and
>> constituted the taxpayer's principal means of support.
>>
>> So if a GoFundMe solicitation rose to that level of effort, I
>> would expect similar tax results. The fact that donors receive
>> nothing in return is not absolutely dispositive of the matter in
>> my opinion.
>
> The difference is that you can't be the non-profit purpose of your
> own nonprofit organization. If someone receives money for a purpose
> that does not qualify as nonprofit, and the donor does not get an
> equity position in the company in return, then to the recipient it
> would be taxable income.
>
> And if it's more than $14,000 it could also require a gift tax
> return.
>
How can it be both taxable income to the recipient AND a gift?
> MTW <mtwi...@yahoo.com> wrote:
>
>> You MIGHT be onto something. For example, I remember Tax Court
>> cases holding that panhandling income was subject to tax (and
>> possibly SE) where the activity was "regular and continuous" and
>> constituted the taxpayer's principal means of support.
>>
>> So if a GoFundMe solicitation rose to that level of effort, I
>> would expect similar tax results. The fact that donors receive
>> nothing in return is not absolutely dispositive of the matter in
>> my opinion.
>
> The difference is that you can't be the non-profit purpose of your
> own nonprofit organization. If someone receives money for a purpose
> that does not qualify as nonprofit, and the donor does not get an
> equity position in the company in return, then to the recipient it
> would be taxable income.
>
> And if it's more than $14,000 it could also require a gift tax
> return.
>
Stuart Bronstein
Aug 14, 2016, 7:31:03 PM8/14/16
to
Taxed and Spent <nospam...@nonospam.com> wrote:
>> The difference is that you can't be the non-profit purpose of your
>> own nonprofit organization. If someone receives money for a
>> purpose that does not qualify as nonprofit, and the donor does not
>> get an equity position in the company in return, then to the
>> recipient it would be taxable income.
>>
>> And if it's more than $14,000 it could also require a gift tax
>> return.
>
> How can it be both taxable income to the recipient AND a gift?
Normally it's not. But if you give someone a tip in a restaurant, that
>> The difference is that you can't be the non-profit purpose of your
>> own nonprofit organization. If someone receives money for a
>> purpose that does not qualify as nonprofit, and the donor does not
>> get an equity position in the company in return, then to the
>> recipient it would be taxable income.
>>
>> And if it's more than $14,000 it could also require a gift tax
>> return.
>
> How can it be both taxable income to the recipient AND a gift?
is a gift of sorts (not legally owed) but it is considered taxable
income. If you give money to a beggar on the street, that is also
technically considered taxable income. If your employer gives you a
gift that is of more than trivial value, it is also considered taxable
income.
If someone who is not a friend or relative of yours, solicits money for
a purpose, and that purpose does not qualify as a nonprofit purpose, it
may also not qualify as a non-taxable gift.
ira smilovitz
Aug 15, 2016, 12:49:49 AM8/15/16
to
On Sunday, August 14, 2016 at 7:31:03 PM UTC-4, Stuart Bronstein wrote:
> Taxed and Spent <nospam...@nonospam.com> wrote:
>
> >> The difference is that you can't be the non-profit purpose of your
> >> own nonprofit organization. If someone receives money for a
> >> purpose that does not qualify as nonprofit, and the donor does not
> >> get an equity position in the company in return, then to the
> >> recipient it would be taxable income.
> >>
> >> And if it's more than $14,000 it could also require a gift tax
> >> return.
> >
> > How can it be both taxable income to the recipient AND a gift?
>
> Normally it's not. But if you give someone a tip in a restaurant, that
> is a gift of sorts (not legally owed) but it is considered taxable
> income. If you give money to a beggar on the street, that is also
> technically considered taxable income. If your employer gives you a
> gift that is of more than trivial value, it is also considered taxable
> income.
>
> If someone who is not a friend or relative of yours, solicits money for
> a purpose, and that purpose does not qualify as a nonprofit purpose, it
> may also not qualify as a non-taxable gift.
>
> --
> Stu
> http://DownToEarthLawyer.com
> https://www.etsy.com/shop/studiobethdesigns
>
> --
A tip given in a restaurant is income because it is given in exchange for services provided. Legal obligation has nothing to with it. The gift to the beggar is generally not income to the beggar, but it can become income due to the intensity of the activity of the beggar.
> Taxed and Spent <nospam...@nonospam.com> wrote:
>
> >> The difference is that you can't be the non-profit purpose of your
> >> own nonprofit organization. If someone receives money for a
> >> purpose that does not qualify as nonprofit, and the donor does not
> >> get an equity position in the company in return, then to the
> >> recipient it would be taxable income.
> >>
> >> And if it's more than $14,000 it could also require a gift tax
> >> return.
> >
> > How can it be both taxable income to the recipient AND a gift?
>
> Normally it's not. But if you give someone a tip in a restaurant, that
> is a gift of sorts (not legally owed) but it is considered taxable
> income. If you give money to a beggar on the street, that is also
> technically considered taxable income. If your employer gives you a
> gift that is of more than trivial value, it is also considered taxable
> income.
>
> If someone who is not a friend or relative of yours, solicits money for
> a purpose, and that purpose does not qualify as a nonprofit purpose, it
> may also not qualify as a non-taxable gift.
>
> --
> Stu
> http://DownToEarthLawyer.com
> https://www.etsy.com/shop/studiobethdesigns
>
> --
Ira Smilovitz, EA
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