Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.Your backing of the player was a loan. Unless you are in the business of making loans, you unfortunately would not have an expense to claim for the loan.The interest he owes you for the loan you provided would be the only amount that you would pay tax on and report as income. The payer is most likely not going to issue you a 1099MISC and the person you loaned the money to should not issue you a 1099MISC. The person you loaned the money to would not issue you anything. You would simply report the interest as regular interest income.
The money that you loaned if yours and the borrower should repay you. If they do not then you could claim a nonbusiness bad debt and that would be an adjustment for you and beneficial for your tax return.
I thought that may have been the case but could only reply to the actual post.
You still cannot change the issuing by the company. They have laws to follow
The answer would still be that they are required to pay and report
The frien cannot even send you a 1099MISC because this is not under that filing
How woudl you be paying twice?
Your friend is the one that has to pay
Their name was showing
You in reality should reimburse them for the taxes
The 1099MISC is for business
is he in the business of gambling
being a professional at gambling is difficult to claim for taxes
The IRS may not accept his claim to be a professional
Then he cannot send a 1099MISC
He should just show the income
You should pay him the tax on that extra income to him, he can give you the amount as a gift
Then your friend has reported, the tax was paid, and you do not pay tax on a gift
Well he will need to report the gift back to you for sure
But still no extra tax to pay
He would file the 709 and use the lifetime exclusion
There is a limit but that is for reporting first
and then for paying tax
$14000 in a year is the limit then the giver reports
in a lifetinme before tax
No, Just Answer regs have this only for contact
your friend will report and pay, the tax should be paid out of this before he gives you anything
he will then file the 709 form to report the gift and use the lifetime exclusion to not pay gift tax
You should not use a conduit in this way again
It goes hand in hand with estate tax, When you make gifts before you die that are over the yearly limits, those amounts reduce your estate deduction.
How about all the poor people that win the lottery?
This is not earnings from work this is gambling
That or the loan but then you really did not loan him anything.
The site is not going to do that
A loan constitutes interest income to the loaner, that means you would have to report a regular amount of interest on your return as income
Correct and in reality it is not and never was a loan
Yes, and the knowledge not to do this again
Our posts passed each other
I did not respond about what the IRS woudl think was fishy
You do not even report the gift
Gifts are only reported by the giver
Yes, please tell me your friend is in the US and a US person though
The receiver is not required to report a gift from a US person
The fact that the person is connected in such a way as to be receiving compensation rather than a gift
It is not a loophole
What you attempted was a loophole
The IRS would questuion a gift if they saw a connection that made them think the "gift" was really payment for services or as employee
Basically yes. The site is not going to do what you want now because from the beginning you attested to being the other person.
Why are you using a lawyer, has this situation already gone to a legal situation?
You can explain then that you used "William" name and info to gamble, (hopefully) with his consent, "William" will report and pay tax from the winnings, then "William" will gift you a sum and report the gift by filing Form 709
I can only explain tax reporting I cannot imagine how a lawyer will come up with a contract or wording for that.
Yes, it will show your name and info
and relationship to the giver
She cannot reassign the income to you.
Her name was used so that is not an option. She will have to report the income.
She can give it away if she wants to
She cannot give you more than $14,000 and not report.
She will be against tax law if she does
She can give $14000 to as many people as she wants in a year and not report. And here you are getting complicated and "webby" again which started the problem (not trying to be mean but....)
but simple pictures are best sometimes
A gift is only a gift is there are no strings attached
So you cannot say hse is giving them anything if you in turn require that they then give it to you
Yes but remember what I said about what a gift is
I hope our CHAT has been helpful
You are most welcome. Your positive rating is always thanks enough.