Creative Finances

[Guest050715-1]

Originally Posted by winemaker

Mind you, a bank is required to report any deposit greater than $8K in a single transaction

And banks have internal cash deposit limits. The trigger amounts vary from bank to bank so I’d ask before ramping up cash deposits.

[guest051510-1]

http://abovethelaw.com/2006/09/the_s...ort_and_sh.php

My question is why she had to pay 100% in taxes? She said (on ASPD no less) she made over $300,000 escorting and her pentalty was approx. $300,000. Am I missing something?

[WTF]

Originally Posted by Nicolette Bordeauxva

http://abovethelaw.com/2006/09/the_s...ort_and_sh.php

My question is why she had to pay 100% in taxes? She said (on ASPD no less) she made over $300,000 escorting and her pentalty was approx. $300,000. Am I missing something?

''The forfeiture case was settled last August; court records don’t indicate the amount of the settlement,. . . ''

Her post said she paid off her 'student loan' which was 300k.

But with penalties and interest one can wind up owing the government more than one made. We do not know what she settled for.

[guest051510-1]

Sorry, I should have posted this link:
http://abovethelaw.com/2009/09/closi...crist.php#more

[zont]

Ok - up to page four and have not seen what I might think is the answer to the original question way back at the beginning...

When I was in Sugar Daddy mode, my SB expressed some concern about it. So I went to work to see what I could find. I do this tax stuff for a living, so I know how to do that.

There are probably thousands and thousands of folks out there that are being supported by folks to whom they are not married or otherwise related. One of the standard arrangements is the "boyfriend" supports the "girlfriend", but you can probably think of others.

I could not find one situation where a "girlfriend" was ever taxed on what her "boyfriend" gave to her - whether or not it was cash, paying her bills, or providing her with use of assets like a house or a car. If the IRS wants to start taxing girlfriends on what the boyfriends give them, they have their work cut out for them.

Same goes the other way... I have read a few threads about strippers' boyfriends getting support.

There were a couple of relatively egregious situations where the IRS tried to tax the lady, but I recall only failure by the govt. And these particular ladies had what we call "bad facts".

The problems arise from two sources - one is the introduction of "more boyfriends". Is two crossing the line, three, four? Who knows!? Does it have to be multiple boyfriends at the same time? Is having them "in sequence" helpful? How long do the relationships have to last? There seem to be no rules on this....

The other is more serious... once the recipient of the funds takes some sort of "professional approach" to the acquisition and maintenance of the relationship, that version of the facts would be tough to win. Straightforward escorting - I see little chance of a win there, but being an SB? Seems to be on the OK side of the tax fence.

My conclusion was this. My SB (a relationship that went on for several years) did not have taxable income on what I was giving to her.

If anyone knows otherwise (and there is "authority" for it), I would like to know too.

[WTF]

Originally Posted by Nicolette Bordeauxva

Sorry, I should have posted this link:
http://abovethelaw.com/2009/09/closi...crist.php#more

I am guessing here but my guess is that she made or the govt contends she made more than 300k over the years. She admitted to paying off a loan of 300k. So there is one clue she did. So the fine with interest is what they contend she owed for multiply years.

[guest051510-1]

Originally Posted by WTF

I am guessing here but my guess is that she made or the govt contends she made more than 300k over the years. She admitted to paying off a loan of 300k. So there is one clue she did. So the fine with interest is what they contend she owed for multiply years.

That's the other thing that bothers me, her admitting to paying off a loan on aspd. Wasn't that board and this board all fiction? If I post, "I'm making $80,000 to fly to Paris next week," who's to say it's not all BS?

Come on, this is the internet, people exaggerate and lie , it's not sworn testimony.

[Rudyard K]

Let’s try to deal with the real world here.

First gifts – The tax on a gift is incurred by the giver…not the receiver. As stated earlier any person may give a gift to any other person, each and every year, up to about $12K per year. The giver can give $12K to ten different people (or 20 different people…or 30 different people…etc) and the giver has not incurred any tax liability. Exceed that $12K in any one year to any one person?..and theoretically the giver is supposed to file a gift tax return. However, there is also a lifetime exemption applicable to the giver that is well over $1MM today. So theoretically, a giver can give $12k per year, to ten different people, for 20 consecutive years, and still give one of those special people a lump sum payment of over $1MM and the giver still would not have incurred any gift tax obligation. The reciever owes no tax on the gift. The $12K per person per year and the lifetime exemption amounts have changed over the years and I just can’t remember what they are today. That’s why practically, no one really goes after a SB/girlfriend support type situation. There is probably no prize for the IRS in such a pursuit. Their main focus is on parents trying to pass to their children large sums of money instead of having to pay estate tax at the end of their lives.

Pay for play – But most everyone on here is not receiving a gift. They are receiving compensation for services rendered. That is taxable income to the receiver. So, everyone can play word games and try to call it a “gift”, but that is not going to fool anyone. It is compensation for services rendered. And if someone thinks they are going to skirt the rules by calling it a gift…while at the same time they are publishing their “gift” rates per hour or visit on a web site…they are sadly mistaken. It ain’t gonna work. And if Big Brother decides to look at you, they will figure out how you have been making money, they will impute an expected income based on your lifestyle (clothes, car, house, credit card payments, household furnishings, etc) and will asses a tax and penalty. And, oh by the way, they will back that up with a potential criminal prosecution.

Assuming this was all a serious question, the best way is to try and maintain a reasonable set of records of income (call it whatever you want) and a reasonable set of records on expenses, and then pay your tax at the applicable tax rate..timely and properly. Do a lot of people do all this, never report anything, and get away with it?...Hell, yes!! Is it worth the risk? I guess it is if you don’t get caught. If you do…maybe not so much.

[atlcomedy]

Originally Posted by Rudyard K

Let’s try to deal with the real world here.

First gifts – The tax on a gift is incurred by the giver…not the receiver. As stated earlier any person may give a gift to any other person, each and every year, up to about $12K per year. The giver can give $12K to ten different people (or 20 different people…or 30 different people…etc) and the giver has not incurred any tax liability. Exceed that $12K in any one year to any one person?..and theoretically the giver is supposed to file a gift tax return. However, there is also a lifetime exemption applicable to the giver that is well over $1MM today. So theoretically, a giver can give $12k per year, to ten different people, for 20 consecutive years, and still give one of those special people a lump sum payment of over $1MM and the giver still would not have incurred any gift tax obligation. The reciever owes no tax on the gift. The $12K per person per year and the lifetime exemption amounts have changed over the years and I just can’t remember what they are today. That’s why practically, no one really goes after a SB/girlfriend support type situation. There is probably no prize for the IRS in such a pursuit. Their main focus is on parents trying to pass to their children large sums of money instead of having to pay estate tax at the end of their lives.

Pay for play – But most everyone on here is not receiving a gift. They are receiving compensation for services rendered. That is taxable income to the receiver. So, everyone can play word games and try to call it a “gift”, but that is not going to fool anyone. It is compensation for services rendered. And if someone thinks they are going to skirt the rules by calling it a gift…while at the same time they are publishing their “gift” rates per hour or visit on a web site…they are sadly mistaken. It ain’t gonna work. And if Big Brother decides to look at you, they will figure out how you have been making money, they will impute an expected income based on your lifestyle (clothes, car, house, credit card payments, household furnishings, etc) and will asses a tax and penalty. And, oh by the way, they will back that up with a potential criminal prosecution.

Assuming this was all a serious question, the best way is to try and maintain a reasonable set of records of income (call it whatever you want) and a reasonable set of records on expenses, and then pay your tax at the applicable tax rate..timely and properly. Do a lot of people do all this, never report anything, and get away with it?...Hell, yes!! Is it worth the risk? I guess it is if you don’t get caught. If you do…maybe not so much.

So basically what I said a couple of days ago much more succinctly in the 5th post of this thread:

Depending on the nature of the SB relationship you may be able to claim it was a "gift" vs. earned income. You should note that a gift of over a certain amount (I think $13,000/year) creates tax implications for the gift giver. Interestingly one exclusion to the gift tax rules are monies paid directly for education or medical bills. So if you directly write a check to Harvard for your SB's tuition, it doesn't count against the cap.

"An envelope for an afternoon" is earned income regardless of how much is in the envelope.

And yes...as WTF points out...the burden of proof is on you to show where your source of support is from, as in "so you claimed x as income but your mortgage alone is 2x, where did that $ come from?"

Disclaimer: consult a tax attorney, I'm just a lay person that has encountered some of these situations.

And as I think, as was the case this afternoon with you & new guy, it wasn't that he was wrong & you were right, but kind of talking across each other....he even if he acted like an authority after a day or two of registering here

Cheers

[notdeadyet]

The quickie version of gift taxes (a rehash-plus-a-bit of RK and altcomedy posts):

1. $13,000 annual exclusion for a gift of a "present interest".
2. $1.0M lifetime exclusion for "taxable gifts" (i.e., those greater than $13k "present interest" gift in any one year to any one donee, or any gifts that are not a "present interest").
3. Gift tax is due on taxable gifts greater than $1.0M.
4. Taxable gifts are pulled into the taxable estate at death for estate tax calculation purposes (of course, we don't have an estate tax right now).

On cash transactions: In addition to IRS issues, the Patriot Act imposed substantial "know your customer" rules on financial institutions of all types. One of the immediate warning signs is a substantial cash transaction.

[Rudyard K]

Atl, if my post implied that I was saying your wrong and I'm right, that was not my intent.

I was addressing what I thought the original question was, albeit having watched the drift also. But never did I mean to imply you were mistaken.

[atlcomedy]

Originally Posted by Rudyard K

Atl, if my post implied that I was saying your wrong and I'm right, that was not my intent.

I was addressing what I thought the original question was, albeit having watched the drift also. But never did I mean to imply you were mistaken.

No worries....I think like on a lot of these things we start "talking across each other" & basically are saying the same thing.

I think someone even admitted WTF was correct today

To our new friend, randomuser, I hope you'll continue to join us here- maybe not as aggessively - I doubt Rudyard spent his day Googling & pasting (can I Trademark that?) - but hope you do stick around.

[WTF]

Originally Posted by atlcomedy

I think someone even admitted WTF was correct today

As long as WE are all getting laid (and paid, sorry ladies don't wanna leave ya'll out)....Ya'll can ALL be correct and I will be WrongThongFong.

Originally Posted by zont

If anyone knows otherwise (and there is "authority" for it), I would like to know too.

Originally Posted by Rudyard K

Let’s try to deal with the real world here.

I think RK was responding to zonts excellent post with another one of equal value.

Bottom line folks is if you don't have a good CPA....get one!

[pjorourke]

Originally Posted by atlcomedy

I think someone even admitted WTF was correct today

No way!!

[atlcomedy]

[QUOTE=WTF;46900]As long as WE are all getting laid (and paid, sorry ladies don't wanna leave ya'll out)....Ya'll can ALL be correct and I will be WrongThongFong.



QUOTE]

Note to Amber's kin at ASPD, as giddy as WTF sounds right now, he'd probably cut a check to fund the entire new website......