PayPal Friends and Family etc....

[Ben Yourg]

If my brother called me,and said he needs to" borrow" $2000. dollars.And,
he needed it right away.If I sent it to him F+F,would this actually go
against the $600. threshold?How does this work?

[swarmee]

Not sure what it has to do with your title of eBay.

If you pay your brother 2000 in PPFF, it would look like $2,000 in income to him. If he declares it to be a "gift" to the IRS (maximum of like $15,000 per person per year), he owes no taxes on it. Once he pays you back, you declare it as a gift as well.

[Ben Yourg]

Thank you.
I put Ebay on there by accident

[MINES_MINT]

As long as you sent it friends and family you are fine. The $600 threshold only applies to Goods & Services transactions, so you shouldn't trigger a 1099 by loaning a family member money.

[Jobu]

As an FYI, if you click "Edit" on the bottom right of your post and then click "Go Advanced" you can change the title.

Originally Posted by Ben Yourg

Thank you.
I put Ebay on there by accident

[BobC]

Originally Posted by swarmee

Not sure what it has to do with your title of eBay.

If you pay your brother 2000 in PPFF, it would look like $2,000 in income to him. If he declares it to be a "gift" to the IRS (maximum of like $15,000 per person per year), he owes no taxes on it. Once he pays you back, you declare it as a gift as well.

The correct statement is that Paypal Friends & Family payments are not supposed to count toward the $600 and not supposed to ever be reported on a 1099-K form.

Not sure what you're getting at when making statements like "If he declares it to be a gift to the IRS" or, "Once he pays you back, you declare it as a gift as well" are supposed to mean, but by making them it is pretty obvious to me you've never filed a gift tax return in your life, nor understand exactly how it works and is perceived by the IRS. Am I right?

To start off, a person receiving a gift doesn't "declare" anything to the IRS about it being a gift. You are correct though in that a person receiving a gift, regardless of the amount or value, does not ever owe any income or other type of tax on the actual gift received.

And the person making the gift doesn't have to ever "declare" anything to the IRS either, unless they exceed the annual gift tax limit amount, which was $15,000 per person for 2021, but was raised to $16,000 per person for 2022. So you can make as many different gifts of up to $16,000, in cash or value, to as many different people as you want in 2022, and you do not have to say, do, or declare anything to the IRS.

If you do end up making a gift of cash or value in excess of $16,000 to any one person in 2022, the person making the gift is supposed to file a federal Form 709 annual gift tax return for that year in which the gift was made. The Form 709 gift tax return has the same filing deadline as your federal income tax Form 1040 return, which is normally April 15th. And which can automatically be extended for 6 months like your 1040 return, by simply filing a federal extension, Form 4868, by the original filing due date.

Your comment about making a loan to your brother for $2,000, which he declares is a gift so he owes no taxes on it, and then you finally declaring it a gift only after he pays you back, makes absolutely no sense at all. First off, when the $2,000 payment is made, it is either a gift or a loan, and your brother wouldn't normally be subject to paying income or any other type of tax on either. Normally the only time your brother should be subject to paying taxes on that $2,000 is if it was paid for services/work he provided or performed for you or maybe a business you own, like as an independent contractor you pay to do your landscaping, paint your house, etc. In which case, you probably should be preparing and sending your brother (and the IRS) either a 1099-MISC or 1099-NEC form reporting the $2,000 paid to him (unless he's set himself up as a corporate entity, in which case you don't need to send 1099s to the corporation as they aren't required).

Secondly, when he finally does pay back the $2,000 loan in say the following or an even later year, exactly how are you now declaring it a gift to the IRS, and why would you? If he paid back the loan, THEN IT WAS NEVER A GIFT! And besides, as I already mentioned, if it somehow was a gift, you don't have to declare, report, or file anything unless the total of all gifts to your brother in that one single year exceeded the annual gift tax limit, which again, is $16,000 for 2022.

And for the record, even if you do make gifts to someone in excess of $16,000 in value this year, it doesn't necessarily mean you're going to currently end up paying any gift tax to the IRS. Every US taxpayer/citizen under current law is granted a lifetime gift and estate tax exemption of $12.06M for 2022, which applies to gifts throughout their life, or against their estate at the death. That exemption amount is currently subject to COLA, and thus generally changes every year (it was at $11.7M for 2021). The requirement to file and report on federal Form 709, for every year in which you made gifts in excess of the annual gift tax exemption amount to any one person, is so the IRS knows how much in excess gifts you are reporting for that year so they can deduct it from your lifetime exclusion amount. Whatever is left when you die is the amount that can then be passed to your heirs without any inheritance tax being owed on it. The whole idea is so that someone getting old and/or sick just can't gift away everything before they die to escape the federal inheritance tax on their estate when they finally do pass. And that also means that when you file and report these gifts on your annual federal Form 709 gift tax returns, you don't owe any current gift taxes, unless you end up using your entire lifetime gift and estate tax exclusion first. And so you know, under current law, the lifetime gift and estate tax exclusion is currently scheduled to be cut in half starting in 2026. Of course it could also be reduced (or however unlikely, increased) at any time by the government.

And one final point. If you are legally married, you can potentially double the amount of your annual gift tax exemption for gifts made to any single person by getting your spouse to agree to split the gift with you. So for example in 2022, if married and your spouse agrees, you could give up to $32,000 in gifts to someone and still not currently owe any gift tax, nor have your lifetime gift and estate tax exemption amount reduced by even a single dollar. Of course to do so, you and your spouse will both have to prepare and file your own individual Form 709 annual gift tax returns for the year the split gift was made, and affirmatively declare and report on them that you are splitting a gift(s). And there is no such thing as a jointly filed gift tax return for married couples, everyone is responsible to file their own.

Also for the record, some states have inheritance taxes as well, and I'm not even going to try and mention or get into the potential impact of gifts on them.

So people, please, please, please be careful when you are posting stuff about taxes and such on an online forum. If you aren't really experienced and truly don't know what you're talking about, it may be best to say nothing at all, as opposed to passing on bad info that could end up causing harm to others. And Swarmee, this isn't knocking you for trying to be helpful. It's just that some of what you're saying may not be currently or totally accurate, but someone reading it who thinks it is may end up doing something they shouldn't, or not doing something they should, as a result.

[Michael B]

Bob,

Haven't we already seen quite a few times on this board that a little knowledge or perception that you have some knowledge can be a dangerous thing.

Recognize that you may have expertise in one area, but that does not guarantee expertise anywhere else.

[BobC]

Originally Posted by Michael B

Bob,

Haven't we already seen quite a few times on this board that a little knowledge or perception that you have some knowledge can be a dangerous thing.

Recognize that you may have expertise in one area, but that does not guarantee expertise anywhere else.

Exactly what are you saying, that I have personally said things that are dangerous? Or are you making a general statement that I should realize that a lot of people on here make comments and statements about things they don't really know about all the time, and are probably never going to stop?

Comments about who's best, what values we think something has, or impressions and opinions and the like are not dangerous in that they are discussions and debate as to how people may think or feel about something. I always try to let it be known if something I'm saying is an opinion, or that I've heard or gotten it from rumors or other sources I've come across or seen, and therefore can't always guarantee are 100% true or accurate.

However, when someone asks a specific question, for which there is a specific, correct, legal answer, it seems a lot different than responding to questions which are more general and do not have specific answers, at least to me. See how I did that, so you know that is my thinking and opinion, and that what I'm saying is not necessarily a hard and irrefutable fact.

Oftentimes people may make responses on here that are in reality just their opinions, but the manner in which they state or make them doesn't always convey that, and appear to be made as absolutely true and correct statements. And when they aren't necessarily true and accurate, someone else reading them may think they're supposed to be true and accurate based on the way, manner, or in the context the author presented them, and as result make a mistake or do something they shouldn't.

I know my posting and asking people to maybe not be answering tax questions that they really don't know a lot about is probably a stupid waste of time on my part, but if as a result at least one person going forwards adds things like "I think" or "IMHO" to statements they make, it would maybe help others to know that isn't necessarily a definitive and correct answer.

[Michael B]

Originally Posted by BobC

Exactly what are you saying, that I have personally said things that are dangerous? Or are you making a general statement that I should realize that a lot of people on here make comments and statements about things they don't really know about all the time, and are probably never going to stop?

Comments about who's best, what values we think something has, or impressions and opinions and the like are not dangerous in that they are discussions and debate as to how people may think or feel about something. I always try to let it be known if something I'm saying is an opinion, or that I've heard or gotten it from rumors or other sources I've come across or seen, and therefore can't always guarantee are 100% true or accurate.

However, when someone asks a specific question, for which there is a specific, correct, legal answer, it seems a lot different than responding to questions which are more general and do not have specific answers, at least to me. See how I did that, so you know that is my thinking and opinion, and that what I'm saying is not necessarily a hard and irrefutable fact.

Oftentimes people may make responses on here that are in reality just their opinions, but the manner in which they state or make them doesn't always convey that, and appear to be made as absolutely true and correct statements. And when they aren't necessarily true and accurate, someone else reading them may think they're supposed to be true and accurate based on the way, manner, or in the context the author presented them, and as result make a mistake or do something they shouldn't.

I know my posting and asking people to maybe not be answering tax questions that they really don't know a lot about is probably a stupid waste of time on my part, but if as a result at least one person going forwards adds things like "I think" or "IMHO" to statements they make, it would maybe help others to know that isn't necessarily a definitive and correct answer.

Bob,

The comment was not directed at you. My apologies if you misinterpreted my comment. You are absolutely correct in what you have said. I was commenting on the others that you have taken to task. We have been in agreement in several other threads that broach similar subjects. Tax law is your expertise and is not something I would comment on. My knowledge is property law.

[swarmee]

Thanks for the clarification.

[Leon]

Originally Posted by swarmee

Thanks for the clarification.

+1. I had known about the FF not counting but some of the other stuff was new to me. (and I changed the title, you're welcome)
.

[Peter_Spaeth]

Originally Posted by BobC

Exactly what are you saying, that I have personally said things that are dangerous? Or are you making a general statement that I should realize that a lot of people on here make comments and statements about things they don't really know about all the time, and are probably never going to stop?

Comments about who's best, what values we think something has, or impressions and opinions and the like are not dangerous in that they are discussions and debate as to how people may think or feel about something. I always try to let it be known if something I'm saying is an opinion, or that I've heard or gotten it from rumors or other sources I've come across or seen, and therefore can't always guarantee are 100% true or accurate.

However, when someone asks a specific question, for which there is a specific, correct, legal answer, it seems a lot different than responding to questions which are more general and do not have specific answers, at least to me. See how I did that, so you know that is my thinking and opinion, and that what I'm saying is not necessarily a hard and irrefutable fact.

Oftentimes people may make responses on here that are in reality just their opinions, but the manner in which they state or make them doesn't always convey that, and appear to be made as absolutely true and correct statements. And when they aren't necessarily true and accurate, someone else reading them may think they're supposed to be true and accurate based on the way, manner, or in the context the author presented them, and as result make a mistake or do something they shouldn't.

I know my posting and asking people to maybe not be answering tax questions that they really don't know a lot about is probably a stupid waste of time on my part, but if as a result at least one person going forwards adds things like "I think" or "IMHO" to statements they make, it would maybe help others to know that isn't necessarily a definitive and correct answer.

Lack of knowledge has not stopped anyone from posting about what they think the law is.

[Lorewalker]

Originally Posted by Peter_Spaeth

Lack of knowledge has not stopped anyone from posting about what they think the law is.

Anyone can post but we should all try to stay in our lane, even if that is a narrow one, but if not it makes for great reading!

[BobC]

Originally Posted by Michael B

Bob,

The comment was not directed at you. My apologies if you misinterpreted my comment. You are absolutely correct in what you have said. I was commenting on the others that you have taken to task. We have been in agreement in several other threads that broach similar subjects. Tax law is your expertise and is not something I would comment on. My knowledge is property law.

Thanks Michael,

I didn't think you were talking about or directing that at me, but wanted to apologize up front in case you were. LOL

I figure pretty much everybody on here is going to eventually have some type of tax impact from their collections. So I figure if I can assist and get everyone straight on how it is supposed to work and what they are supposed to do, they are better able to make a decision for themselves on how they want to handle things for tax purposes. I am not trying to tell people what to do, just give them better info to make their own decisions. Trust me, income and other taxes are a pain in the you-know-what. I do not know that much in reality, but do know when some research is needed, and usually where to go.

Property law is no easy area at all. Worked for a real estate developer/management company for 15 years and saw more leases and property deals than you can imagine. I tip my hat to you for your expertise.

[BobC]

Originally Posted by swarmee

Thanks for the clarification.

John,

Once again, not picking on you at all. But could see you may have heard or been misinformed about some things, and just wanted to set the record straight for everyone's benefit.

Hang in there, hope this is helpful to you and others.

[benge610]

A thank you to all contributors on this thread. I am a small fish who wants to continue to fly, "under the radar"; cuz there are a few flying fish left in this hobby.
Ben

"I love baseball history backstory; especially when it involves cards."

[BobC]

Originally Posted by Leon

+1. I had known about the FF not counting but some of the other stuff was new to me. (and I changed the title, you're welcome)
.

Okay Leon, now I'm curious, so what did you learn?

I'll add a little bit of estate planning for you in regards to gifting as well. If you don't ever plan to sell all of your collection, you'll end up leaving it to your family in most likely one of two ways, either as a gift while still alive, or inheritance after you pass.

The advantage to gifting it to someone is that it is then out of your future estate, and any future appreciation belongs to whomever you gave it to. However, on the downside, when you gift your collection to someone while you're still kicking, your original tax basis gets carried over to the person you gifted the collection to. So if you had a card in your collection that you pulled from a pack say 50-60 years ago, a portion of that original pack cost is the basis used by the person you gifted the card to that they use to determine how much they made/lost should they subsequently sell the card. So as a result, it would potentially make everyone's life easier if when gifting your collection to someone, you also give them your tax basis so they have it going forward. When you then go to determine if you have to report the gift for gift tax purposes, you don't use your basis though. You have to use the current FMV of the collection to determine if you exceeded the annual gift exemption amount, and if so, then file a gift tax return. The FMV is also used to determine if you then currently owe any gift tax on the gift. (And if you do currently end up owing any gift tax, that gets added onto the tax basis of the collection you just gifted to someone.)

If you wait to leave your collection to your family as part of your estate, you now use the FMV of the collection as of your date of death to figure if there is any inheritance tax due. But for whoever inherited the collection, they get a stepped-up basis in the collection also equal to its FMV at your DOD, not your carryover basis they would have gotten had you gifted it while still alive instead. So theoretically, if whoever inherits your collection goes to sell it right away, the stepped- up basis they inherited from you should be about what it sells for, so there should be little or no gain to pay tax on. However, if you gifted it, the person selling uses your old tax basis, and not the FMV at the time of your gift, to determine how much they made on the subsequent sale, and are more likely to end up with significant income, and as a result, tax due.

Now this is basically how it works under current tax law, but can always change, so one needs to keep that in mind. And you also have to consider the lifetime estate and gift exemption amount in your planning as well. As I previously mentioned in an earlier post, that lifetime exemption amount is already scheduled to get cut in half in 2026, when a lot of other things passed as part of Trump's tax law changes from back in 2018 are also going to go away.

So there you go, some simple Estate/Gift Planning 101 for everyone. Very, very basic stuff though. So would still advise to seek more help regarding everyone's own particular unique situation and circumstances.

[ThomasL]

Originally Posted by Jobu

As an FYI, if you click "Edit" on the bottom right of your post and then click "Go Advanced" you can change the title.

I always wondered how this was done. Thank you for pointing this out

[JustinD]

Originally Posted by Peter_Spaeth

Lack of knowledge has not stopped anyone from posting about what they think the law is.

I fully admit I know very little about law other than what I don't like about it, lol.

As for taxes, other than hating them to my core I know again...nothing. I was just telling the wife that its well past time to hire a professional planner to keep as little out of the greedy hands of the politicians and keep as much as possible in our wallet

Our incomes have changed drastically since we met and I find it shocking how easy it is to double your income, but actually have less than you made prior once they start up the siphon. You are definitely needed in this world Bob!

(I feel no one ever needs my expertise...not many mortgage discussions on this forum, lol.)

[BobC]

Originally Posted by JustinD

I fully admit I know very little about law other than what I don't like about it, lol.

As for taxes, other than hating them to my core I know again...nothing. I was just telling the wife that its well past time to hire a professional planner to keep as little out of the greedy hands of the politicians and keep as much as possible in our wallet

Our incomes have changed drastically since we met and I find it shocking how easy it is to double your income, but actually have less than you made prior once they start up the siphon. You are definitely needed in this world Bob!

(I feel no one ever needs my expertise...not many mortgage discussions on this forum, lol.)

Don't worry Justin, I hate law as well, especially tax law. LOL It is often a complicated, confusing, and seemingly ever-changing mess.

And I tip my hat to you. I've worked with many loan/mortgage officers over the years, and know exactly all the pain-in-the-a$$ crap you've had to go through since the 2008 real estate mortgage loan debacle and meltdown. The way the government regulations cracked down on those trying to get a loan after 2008 was insane. And very few people realize the extent and changes that came as a result. I always felt the government didn't direct as much blame and punishment towards the proper groups and parties involved as they should have. For example, a lot of the problems seem to have been caused by the improper ratings placed on CDOs sold internationally, especially in Europe. Yet I never really heard of any retribution by Moody's or Standard and Poor's for their maybe not-so-accurate credit ratings on all those bundled loan obligations being sold before the 2008 crash.

By the way, please tell me you don't work for Mr. Cooper. That has got to be the dumbest name for a mortgage loan company I ever heard of. LOL

Otherwise, if you ever do have any questions, feel free to ask, I'll try to help.

P.S. Just a thought for you and your wife regarding taxes. Do you look at filing them both jointly and separately to see which is more beneficial? Filing jointly usually produces the lowest federal tax bill, but depending on many factors it can sometimes save you money to file separately.

[JustinD]

Originally Posted by BobC

Don't worry Justin, I hate law as well, especially tax law. LOL It is often a complicated, confusing, and seemingly ever-changing mess.

And I tip my hat to you. I've worked with many loan/mortgage officers over the years, and know exactly all the pain-in-the-a$$ crap you've had to go through since the 2008 real estate mortgage loan debacle and meltdown. The way the government regulations cracked down on those trying to get a loan after 2008 was insane. And very few people realize the extent and changes that came as a result. I always felt the government didn't direct as much blame and punishment towards the proper groups and parties involved as they should have. For example, a lot of the problems seem to have been caused by the improper ratings placed on CDOs sold internationally, especially in Europe. Yet I never really heard of any retribution by Moody's or Standard and Poor's for their maybe not-so-accurate credit ratings on all those bundled loan obligations being sold before the 2008 crash.

By the way, please tell me you don't work for Mr. Cooper. That has got to be the dumbest name for a mortgage loan company I ever heard of. LOL

Otherwise, if you ever do have any questions, feel free to ask, I'll try to help.

P.S. Just a thought for you and your wife regarding taxes. Do you look at filing them both jointly and separately to see which is more beneficial? Filing jointly usually produces the lowest federal tax bill, but depending on many factors it can sometimes save you money to file separately.

Not Mr. Cooper.

In actuality I will be working for someone new very shortly as I just received a very impressive proposition this week and I would have to be committed to an asylum if I was to turn it down. I will get to take my many years of origination expertise to a virtual commute each morning to Washington DC and work on new product for one of the GSE's. Very excited.

Been a solid week.

[BobC]

Originally Posted by JustinD

Not Mr. Cooper.

In actuality I will be working for someone new very shortly as I just received a very impressive proposition this week and I would have to be committed to an asylum if I was to turn it down. I will get to take my many years of origination expertise to a virtual commute each morning to Washington DC and work on new product for one of the GSE's. Very excited.

Been a solid week.

Congrats! Sounds fantastic, and glad you have nothing to do with Mr. Cooper. Had a client that had a lot of problems with them, and also heard they may not be the best people to deal with overall.