The PayPal 1099-K I received is for $8900, but it was a gift from my Mother-In-Law for my daughter's braces & other dental out of pocket. Do I need to report this?

[DavidD66 · Accepted solution]

Yes, you have to report it, but the $8,900 gift will not be taxable.  When you enter your 1099-K, you will be asked "Which type of income is your 1099-K for?".  Scroll to the bottom and select "Other".  On the next screen "Let's get the info from your 1099-K", enter the information on your 1099-K.  Below the box 1 entry, indicate that "This amount in box  1a is too high or includes some personal transactions".  Enter the amont of box 1a that was a gift ($8,900).  Click on Continue.  You will have reported your 1099-K, but it will not show up on your tax return.