A person owns a vacation home. He doesn't rent it out and doesn't try
to make money on it. But he does let family members use it when he
isn't. The family members pay him a small amount to defer his out of
pocket costs. These payments are made through Venmo.
Now that Venmo will be sending out 1099-K, what is the best way for him
to handle this? I guess he could handle it like a hobby, and show the payments as income, offset by expenses. But is there a better way?
Thanks for any insight you can give.
--
Stu
http://DownToEarthLawyer.com
--
Stuart O. Bronstein wrote:
A person owns a vacation home. He doesn't rent it out and doesn't
try to make money on it. But he does let family members use it
when he isn't. The family members pay him a small amount to defer
his out of pocket costs. These payments are made through Venmo.
Now that Venmo will be sending out 1099-K, what is the best way
for him to handle this? I guess he could handle it like a hobby,
and show the payments as income, offset by expenses. But is there
a better way?
If it isn't income, it shouldn't be reported. There will be lots
of problems with 1099-K reports next year. We'll have to see how
things play out. Personally, I expect that the $600 reporting
threshhold will be suspended or delayed. But my crystal ball is
murky at best, and opaque today.
A person owns a vacation home. He doesn't rent it out and doesn't try
to make money on it. But he does let family members use it when he
isn't. The family members pay him a small amount to defer his out of
pocket costs. These payments are made through Venmo.
Now that Venmo will be sending out 1099-K, what is the best way for him
to handle this? I guess he could handle it like a hobby, and show the payments as income, offset by expenses. But is there a better way?
Thanks for any insight you can give.
On 10/11/2021 12:00 PM, Stuart O. Bronstein wrote:
A person owns a vacation home. He doesn't rent it out and doesn't try
to make money on it. But he does let family members use it when he
isn't. The family members pay him a small amount to defer his out of
pocket costs. These payments are made through Venmo.
Now that Venmo will be sending out 1099-K, what is the best way for him
to handle this? I guess he could handle it like a hobby, and show the
payments as income, offset by expenses. But is there a better way?
Thanks for any insight you can give.
Maybe they shouldn't be making payments through Venmo.
According to Taxed and Spent <nospamplease@nonospam.com>:
On 10/11/2021 12:00 PM, Stuart O. Bronstein wrote:
A person owns a vacation home. He doesn't rent it out and doesn't try
to make money on it. But he does let family members use it when he
isn't. The family members pay him a small amount to defer his out of
pocket costs. These payments are made through Venmo.
Now that Venmo will be sending out 1099-K, what is the best way for him
to handle this? I guess he could handle it like a hobby, and show the
payments as income, offset by expenses. But is there a better way?
Thanks for any insight you can give.
Maybe they shouldn't be making payments through Venmo.
Venmo is mostly used by people to share expenses and reimburse each other, none of which is taxable. There is also Venmo
for business which accepts credit cards and charges a commission but that's much less common.
Even if they send a 1099-K that doesn't mean you have taxable income:
https://www.verifythis.com/article/news/verify/money-verify/users-of-cash-apps-will-get-a-1099-form-but-that-doesnt-mean-extra-taxes/536-04e9ffd7-82e0-4685-9ec0-4dc08c0b3d01
“Like my wife often receives Venmo payments from some of her girlfriends
John:
From that article you linked to:
“Like my wife often receives Venmo payments from some of her girlfriends >for groceries, and she makes those payments. And so that wouldn’t result
in any income. And even if my wife got such a form, she could ignore it.”
Is that true. You can totally ignore a 1099-K?
According to MZB <moo@noway.prudigy.net>:
https://www.verifythis.com/article/news/verify/money-verify/users-of-cash-apps-will-get-a-1099-form-but-that-doesnt-mean-extra-taxes/536-04e9ffd7-82e0-4685-9ec0-4dc08c0b3d01
John:
From that article you linked to:
“Like my wife often receives Venmo payments from some of her girlfriends >> for groceries, and she makes those payments. And so that wouldn’t result >> in any income. And even if my wife got such a form, she could ignore it.” >>
Is that true. You can totally ignore a 1099-K?
I guess we'll find out.
The law didn't change the definition of taxable income, only the reporting rules.
There have always been differences between what's on the 1099-K and one's income. For example, if a business allows
people to make debit card payments with cash back, the 1099-K will report the full amount, but it subtracts
the cash back amounts to get its reportable income.
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