If you write a personal check($50,000) to a close friend for whatever reason, does it get reported to IRS?

Question

this is personal check from personal checking account in Bank of america or Washington mutual & that's the exact amount you have. So after the check gets cashed, you have zero balance. will this be a problem for any reason?

Answer 1

yes, any thing 10,000 and over get's reported.

Answer 2

No. The IRS is concerned with tax issues.

There are other government agencies which monitor money laundering. Which one depends on the type of charter the bank has. Much is made of $10,000. This refers to cash and things like cash that are hard to trace by themselves such as bank official checks and money orders. A Currency Transaction Report must be filed for other, smaller transactions that are "suspicious" or appear to be structured to evade reporting requirements.

The IRS will only find out about this if they notice the fried for other reasons. Then this transaction will stand out. If it's income, why didn't he pay taxes. If it's a gift, why wasn't gift tax paid? It is above the threshold for gift tax exemption.

Answer 3

Most banks just close out your account when you hit 0 unless they charge you for the account then you need to call as soon as the check cashes and close it. I am not sure about the whole IRS thing. On a personal account they would be looking for proof of income I would think not proof of spending.

Answer 4

This will not close out the account, you have to do that in person at your branch office. If you gift someone that kind of money of gift tax return (I believe it is form 709) has to be filed. Tax gifting exempt amount in the US is $12,000.00 per person or entity per year.
I would recommend consulting with a financial planner or estate planning tax attorney before releasing that kind of money to one individual.
By the way, banks report ALL CASH transactions over $10,000.00 to the feds.

Answer 5

If you wrote somebody a check for $50k, the onus of responsibility to report that money as income would fall to the person cashing or depositing the check. Understand, the gubmint doesn't keep track of all your personal financial transactions... but they have nearly unlimited power to audit you if they feel that there's something fishy going on.

However, I think the best test of this theory is for you to send me a check for $50k and we'll run this through scientific testing. :)

Answer 6

your friend will have to claim it as income......besides when you write that kind of a check it will automaticlly be reported by the bank........you have to leave 10 bucks in your account so it won't be closed out.....it would be better if you with drawn the money in smaller amounts.......less questions will be ask.........i hope that money is clean.....lol

Answer 7

Banks are required by law to report any transactions over $10,000 to the IRS.

Answer 8

yes. Any amount 10,000 and over has to be reported to the government, especially these days with the threats of domestic and global terrorism

Answer 9

Yes, anything $10,000 or above that gets transfer from or to your account in a weeks time is reported

(ex. if you make 10 $2000 transfers from Monday to Monday, or Wednesday to Wednesday,it will be reported)

Answer 10

the person recieving the money in denominations over 10,000.00 will have a form submitted through the bank and yes it goes to the irs

Answer 11

If your friend deposits the check, yes, it gets reported to the Instant Robbery Service (IRS). All deposits of $5K or more are reported.