Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
dallasbertola
New Member

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

 
2 Best answer

Accepted Solutions
maglib
Level 10

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

This is an area of tax that's still developing.  The IRS has handed out big tax bills to people who have received large sums of money on go fund me in the last couple of years (many are still being fought as they can be considered gifts).  In order to be non-taxable funds generally have to come through a qualifying charitable organization or be considered gifts (which normally only the payor would have tax liability if excess gifting). If the funds are considered gifts then there are no tax implications for the recipient.

The issue at hand is the 1099-K that the IRS requires be sent to recipient.

Typically, money raised through a crowdfunding site such as Go Fund Me is processed through third-party settlement entities. IRS rules for those processing entities are very clear regarding the requirement to issue the 1099-K:

The settlement of third-party payment network transactions above the minimum reporting thresholds of

  • gross payments that exceed $20,000, and
  • more than 200 such transactions.

A potential manner to report this is to include the amount on the 1040 as “Other Income,” and reflect a negative adjustment in the same amount with a statement attached to your return (must file by mail then). 

Example statement to attach:

"All amounts in the 1099-K are excludable from income under IRC Section 102. These amounts reflect the money taxpayer received as the result of gifts from donors. Those gifts were used to pay the medical expenses of the taxpayer and are justifiably excludable from gross income as gifts."

**I don't work for TT. Just trying to help. All the best.
***Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Opus 17
Level 15

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

In most cases, donations paid directly to the school by the parents will be tax deductible charitable contributions (unless the school is a for-profit private school).  Donations that are passed through a private individual are never tax deductible to the person making the donation, even if the ultimate purpose is charitable.  If you receive the payments and give donation receipts indicating that the purpose was charitable or that the donation is tax-deductible, you can get in big trouble.  Also, if you receive money from other people and then pay it to the school, you can’t claim it as a tax deductible donation to charity either.

 

There are no other tax implications of you receiving a gift from parents and then using that gift to buy school supplies, as long as it is clear that you are not performing any services in return for the money. However, at the amounts you are talking about, if go fund me issues you a 1099, you will have to report the donations on your tax return and find some way of convincing the IRS that it was not taxable income to you.  Go fund me will also probably deduct substantial transaction fees.  I don’t understand why the parents can’t simply pay the school directly.

 

If there is a PTA, it may already be set up as a tax-deductible organization, and it may be in a better position to accept donations and transfer them to the school than you would be as a private individual.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

8 Replies
maglib
Level 10

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

This is an area of tax that's still developing.  The IRS has handed out big tax bills to people who have received large sums of money on go fund me in the last couple of years (many are still being fought as they can be considered gifts).  In order to be non-taxable funds generally have to come through a qualifying charitable organization or be considered gifts (which normally only the payor would have tax liability if excess gifting). If the funds are considered gifts then there are no tax implications for the recipient.

The issue at hand is the 1099-K that the IRS requires be sent to recipient.

Typically, money raised through a crowdfunding site such as Go Fund Me is processed through third-party settlement entities. IRS rules for those processing entities are very clear regarding the requirement to issue the 1099-K:

The settlement of third-party payment network transactions above the minimum reporting thresholds of

  • gross payments that exceed $20,000, and
  • more than 200 such transactions.

A potential manner to report this is to include the amount on the 1040 as “Other Income,” and reflect a negative adjustment in the same amount with a statement attached to your return (must file by mail then). 

Example statement to attach:

"All amounts in the 1099-K are excludable from income under IRC Section 102. These amounts reflect the money taxpayer received as the result of gifts from donors. Those gifts were used to pay the medical expenses of the taxpayer and are justifiably excludable from gross income as gifts."

**I don't work for TT. Just trying to help. All the best.
***Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
xmasbaby0
Level 15

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

Gifts that you receive are not taxable and do not get entered on your tax return.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Gummyrubber55
New Member

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

Help pay bills for rent lights water and propane. Stroge  and fines

xmasbaby0
Level 15

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

@Gummyrubber55 

Your post was added to someone else's older thread about receiving money from GoFundMe.  It is not at all clear whether you are also asking about receiving such funds.  You did not even really ask a question.

 

"Help pay bills for rent lights water and propane. Stroge  and fines"  is not a question.  Please start your own new thread and ask your question--if you have one.

 

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
lkramer1981
New Member

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

Hi there!  I would like to set up a GoFundMe account to raise money to purchase air purifiers for each classroom where my children go to school.  I am looking to raise about $20,000 from the parents, and then I would write a check for 100% of the money received (and easily tracked via a bank account that I almost never use) to the school.   The school has already purchased the air purifiers with the expectation that we will raise enough money to reimburse them.   Will I have any tax obligation or reporting obligation in this scenario?  Would it be better to have the school receive the donations directly?  I've offered to manage this whole project and am trying to not put this on the school staff who is already maxed out.  Thank you so much!

xmasbaby0
Level 15

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

Why not have the donations go directly to the school instead of having GoFundMe take a big chunk of the donated money?  And....why not set up an account that is only for the school and not an account in your name?

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Opus 17
Level 15

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

In most cases, donations paid directly to the school by the parents will be tax deductible charitable contributions (unless the school is a for-profit private school).  Donations that are passed through a private individual are never tax deductible to the person making the donation, even if the ultimate purpose is charitable.  If you receive the payments and give donation receipts indicating that the purpose was charitable or that the donation is tax-deductible, you can get in big trouble.  Also, if you receive money from other people and then pay it to the school, you can’t claim it as a tax deductible donation to charity either.

 

There are no other tax implications of you receiving a gift from parents and then using that gift to buy school supplies, as long as it is clear that you are not performing any services in return for the money. However, at the amounts you are talking about, if go fund me issues you a 1099, you will have to report the donations on your tax return and find some way of convincing the IRS that it was not taxable income to you.  Go fund me will also probably deduct substantial transaction fees.  I don’t understand why the parents can’t simply pay the school directly.

 

If there is a PTA, it may already be set up as a tax-deductible organization, and it may be in a better position to accept donations and transfer them to the school than you would be as a private individual.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
lkramer1981
New Member

I received money from a GoFundMe greater than $14,000, where can I put that personal gift?

Thank you so much for you response!  I'll see about going through the PTA.

Dynamic AdsDynamic Ads
Privacy Settings
v