got a 1099 form for money my brother gave me?
Hi,
Last summer we were in foreclouser, big time cc debt just no way out. Well i had to swallow my pride and discussed how hot water we were in. my grand father, then my father both now pased away had a large company. my older brother Tom now owns that company and now a multi millionare, while me and my other brother struggle day to day. My mom asked him to help us out. He gave my mom a check for us for 75k. My mom made sure our house payment was up to date, paid off all of our debts and the rest 10k is put away in a emergency fund. About the same thing with my younger brother erics family. Both Eric and my self got a 1099 form from Duffy companies, Toms company for that amount he gave us. Now i hear we have to put this down as income, we have tried to contact him, but he is in europe traveling. i dont know here i am struggleing and 75k is pennies to him. I am so pissed now because he has gotten everything in life.
A corporation cannot give someone a gift, so the money he (The Duffy Company) gave you was characterized as compensation by him. It’s unfortunate for you, tax-wise, but your brother’s company can write it off their corporate taxes.
Did you sign a promissory note? Is it your intention to pay this money back with interest? If not, then you’re stuck with taxable income. If your brother had given you money out of his own pocket, you would have not had tax implications, but he personally would have had a gift tax issue.
Be thankful that someone bailed you out and work something out with the IRS to pay the taxes on this amount.
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