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by modeless 1536 days ago
This is false in the US. Neither loans nor gifts of $1200 are taxed.

Also, loans don't evade the capital gains tax, they merely delay it. Stepped-up basis is what evades the capital gains tax.
1 comments
HarryHirsch 1536 days ago
Yes, when your friend says it's a loan and you treat it appropiately on your tax return it's not taxed. Else it will be. And if you can delay capital gains tax, great for you! How do I delay income tax?
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modeless 1536 days ago
Wrong. If it's not a loan then it's a gift and that's not taxed either for $1,200 as I mentioned. No need to even report it if it's under $16,000 per year.
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HarryHirsch 1536 days ago
Venmo will happily send you a 1099 form if it's above the 600 dollar threshold. We have Joe Biden to thank for that. It used to be higher.
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vmception 1536 days ago
A form doesn’t mean a tax is due

It means a transaction was reported and that you better have a good story about why the tax isn’t due and why you didn’t report it on your own forms

The people that are worried about the venmo 1099 are the people that have not been doing a lot more under the table

(Not to invalidate the rest of the population that is just irrationally afraid of tax collectors)

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giantg2 1536 days ago
I'm not sure that's true. They are only supposed to report on a 1099 if they know it's earned income, not just a transfer. If they're reporting mere transfers to the IRS, then that's a problem.

That said, based on personal experience, I don't think Venmo is sending 1099s to everyone above that cumulative amount. I do believe they categorize transfers based on personal or commercial use. I expect a 1099 to be issued only for the commercial transfers.

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vmception 1536 days ago
Transaction is the word I use, not transfer, just in case you mentioned transfer for some other reason. My reason is deliberate. Some kinds of transactions are tax events, others aren’t. Venmo has no way of knowing. Anybody doing automated 1099s has no way of knowing.

1099s just tell the IRS to look for a tax filing from the same tax ID that matches.

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oh_sigh 1536 days ago
The 1099 is for sales of goods and services. Your friend loaning you $1200 is not a sale of a good or service.
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