Hi...
For helping a friend with getting him a lead on an investor for a major project, this friend wants to repay me in kind with a sort of "finder's fee". Basically, he's giving me money for finding the investor. Say he wires x amount of dollars into my checking account. Regardless of this fact, is this or any amount under these conditions "taxable as income"?
2006-11-03 07:21:20 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
What if it's personal and MORE than 11k?
I understand that a CPA would best be able to help me out here. Thanks.
2006-11-03 08:30:25 · update #1
Depending on the circumstances, (very specific ones) yes. If you are a professional in the finance or banking world it is without a doubt taxable. Further, if it were requested that you find this investor and did so at your friends behest, then that makes you a professional and therefore it is taxable.
The las is very uncertain in these circumstances for obvious reasons. How can the IRS tell the difference between a gift or loan from a friend, and a finder fee? That being said, if there is a "recombundant pattern" then it will eventually be considered a wage or regular payment. All in all, there is a lot of grey area here...I would suggest speaking with your particular CPA if you have one prepare your taxes, or go over the software your use to determine your exact tax liability.
2006-11-03 07:28:09 · answer #1 · answered by gnibblet 2 · 0⤊ 0⤋
Income Tax Finder
2016-11-07 07:51:25 · answer #2 · answered by hellweg 4 · 0⤊ 0⤋
of course, all income is taxable,
even if he buys you something, if he deducts it from his revenue it causes an audit trail to you.
You could open up a checking account in Nevada under an assumed name (not perfectly legal).
And that would be tax avaision by the way, if you did not report it.
2006-11-03 07:33:38 · answer #3 · answered by ebiz1@sbcglobal.net 2 · 0⤊ 0⤋
If it is a "finders fee" and he is paying you out of business funds, then yes it is taxable income. However, if it is under $11,000 and came from his personal funds, you could call it a "gift" and avoid taxes.
2006-11-03 07:52:45 · answer #4 · answered by Tim 6 · 0⤊ 0⤋
It sounds like income to me.You performed a service and he paid you for it. He is probably deducting it as business expense. He did not intend it to be a gift.
You will have to pat federalincome tax and self employment tax (schedule Se) and state income tax.
2006-11-03 10:24:24 · answer #5 · answered by waggy_33 6 · 0⤊ 0⤋