Get Out of Debt Guy

Why Are the Donations I Collected to Help a Friend Taxable Income to Me?

Posted February 4, 2015

Dear Steve,

My friend's mother was diagnosed with cancer and died within a few short months. As the end was nearing I started a GoFundMe page for my friend (age 24) who was to become the sole guardian of her TRIPLET siblings. Due to an amazing community effort, $36,000 was raised. All said it was a miracle...except when the 1099-Kk came in my name and I was told to CLAIM the $36,000 as INCOME. I cannot do this! 

I did not get one cent of this money and my student loans are income based, so if the family even (very kindly) paid the taxes on the money, my student loan payments would increase by $500 a month, something I just can't afford.

We are trying to transfer the account to her name but I am at a loss as what to do. I feel that she shouldn't have to pay taxes on this either, especially when fees were taken out and they netted $33,000, not $36,000. What do we do?!?


…Click here to read my answer.

Steve Rhode
WRAL Get Out of Debt Guy

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About this Blog:

Steve Rhode has had careers in opthalmology, real estate and as the head of a nonprofit debt counseling firm. On his blog, he offers hard-won, free advice about getting out of debt, consolidation and making the right choices as you manage your money.