1099-K for gift money received

Forum|Forum|3 years ago
June 8, 2022
3 replies
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Hello,

Because of the new IRS tax law regarding 1099-K's (https://www.irs.gov/businesses/understanding-your-form-1099-k), PayPal will be issuing me a 1099-K in January for payments I received this year. However, the payments I received were gift funds from family, but they were sent as if I was selling goods. Is there any way I can make sure I can tell the IRS in my tax return for next year that these payments should not be considered payments for goods?

Thank you.

Best answer by AdamNe

Hello @philomath !

If you receive a 1099-K with reportable transactions, you will need to claim those amounts on your tax return to avoid receiving a CP2000 notice from the IRS after filing.

However, if you are sure the amounts are not taxable income to you, you can create an offsetting "other income" entry as a negative amount, and write something like "Gifts reported on 1099-K" in the description line.

I hope this helps you! Please respond here if you have further questions.

All best,

Adam, EA

TurboTax Live Expert

AdamNeAnswer

Hello @philomath !

If you receive a 1099-K with reportable transactions, you will need to claim those amounts on your tax return to avoid receiving a CP2000 notice from the IRS after filing.

I hope this helps you! Please respond here if you have further questions.

All best,

Adam, EA

TurboTax Live Expert

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philomathAuthor

Thank you for the help, @AdamNe ! By entering a negative amount in "other income", do you mean on line 8 of the 1040 form?

AdamNe

@philomath Yes, that is right. It will show up on line 8z of Schedule 1.

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55Abcdefgh11

Hello my name is [PII removed] and birthday [PII removed] I just want to no do yall track gifts vouchers an money or money gift cards from gambling playing video games or from shopping diong receit bonus for gift cards

JamesG1

Some of the items that you list are reportable taxable income. We do not know whether you will receive one or more IRS forms 1099-K or other tax forms reporting this activity.

Payment settlement entities (PSEs) issue IRS form 1099-K. Contact the appropriate payment settlement entity (PSE), to inquire what, if any of these items, will be reported to you.

@55Abcdefgh11

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