topic 1099 K in Education

1099 K

Duke2 — Sun, 29 Mar 2020 00:01:26 GMT

My daughter did a facebook fund raiser for my son and his family, while he was in the hospital. She raised over 20,000.00 for his family. He has passed and my daughter is now receiving a 1099K for the funds raised. Does she have to pay tax on the full amount or is it only on the amount over 20,000.00? Also she is not a business and these were all donations for my son's family. Is there a way of showing (she has print out of all who donated)that they were all donation?

Please help

Duke

Re: 1099 K

KarenM90 — Sun, 29 Mar 2020 00:41:24 GMT

It depends. This type of fundraiser can generally be considered a gift as long as no benefit was received in exchange for the funds.

Here is an article that addresses these types of transactions: Crowd Funding

Your daughter should be sure to maintain records that these funds were gifted to your son's family and she does not need to report the 1099K on her return.

Re: 1099 K

Duke2 — Tue, 31 Mar 2020 15:48:53 GMT

Thank you . That helped alot. IRS won't come back on her later to make her pay? This is scary. It's a lot of money. We had no idea this would happen. She just wanted to help her brother and his family out during his cancer battle.

Re: 1099 K

Ruth7 — Tue, 31 Mar 2020 20:26:36 GMT

I contacted you earlier regarding a 1099K for a fundraiser my daughter did.

I see that we can do a letter asking for a ruling. Do you have an address to the IRS that

I would send this letter for ruling? I didn't realize I already had a user name.

Please advise

Thank you

Duke2

Re: 1099 K

ThomasM125 — Tue, 31 Mar 2020 20:37:08 GMT

You can submit form 8275 "Disclosure Statement" with your tax return to explain your position and why the income was not reported on your tax return. That should save you from being penalized later on even if the IRS rules against your position.

Here is a link to the form:

https://www.irs.gov/pub/irs-pdf/f8275.pdf