[Mindy]

My husband passed away suddenly last Friday. Friends/co-workers etc are either sending me money through Venmo and someone else started a GoFundMe.

I am currently financially stable and am gainfully employed so I’m planning on just putting these funds in a high yield savings account. My current plan is to let the funds sit there for a while until I have a better idea of what being a single mom with a single income looks like so I can get my budget adjusted accordingly.

How do I handle these donations? Do I just transfer $10k from Venmo  to my bank account? I know there was some new law about $600 but is that just for business transactions? Do I just transfer $500 at a time? What the heck do I do?

[John]

It’s all tax free so there’s nothing to hide or structure. If they issue a 1099, your CPA needs to make notations on the return to report it and back it out so there is no tax due.

[Michael]

Sorry for your loss. Good call on just letting the money sit while you mourn and sort out your life later.

[Paige]

I’m so sorry for your loss. I love that your community is trying to support you. Definitely transfer money out of Venmo ASAP when you receive transactions from others. Venmo is not FDIC-insured — although it’s not likely, if Venmo goes down tomorrow, all money sitting in there is lost with little chance of recuperation, so I suggest transferring that money out as often as you can so that your loved ones’ donations can be put to good use.

[Conner]

The $600 thing is indeed just for business transactions and even then it just means you get sent a tax form but not necessarily that you owe taxes. You don’t have to worry about that. Transfer from Venmo at your leisure in any amount that is convenient for you.

It’s your money and you can use and transfer it normally without worry.

[Enilda]

Your kids may qualify for social security if he worked for 10 years or so. There is no tax for you on gifts. So, you should be good. Just save an image of the accounts before transferring the money to yourself.

[Ron]

Just transfer. Givers who gibe over $10k in gift to another individual during a year need to report that indv to indv transaction on a gift tax report. The recipient needn’t do anything.

[Elena]

If you try to circumvent the financial rules (or: do a bunch of <$600 transfers to avoid hitting the threshold), it may trigger a suspicious activity report (SAR). Just do whatever you need to do with the money. If Uncle Sam has questions, they’ll let you know.

[St Patrick]

Tax attorney here. First of all, I am very sorry for your loss. I cannot imagine what you must be going through.

The Venmo and GoFundMe money all represent gifts. These are not taxable income. Transfer the money out of Venmo and GoFundMe, and then dump it into a high-yield savings account while you figure out your next steps.

There may be some reporting issues come tax time, but you can cross that bridge when you come to it. Rest assured you will not owe any taxes on receiving the money. You will have taxes on any interest or capital gains depending on what you *do* with the money, but not on receiving the money itself.

For now, just take care of you and your family. The rest is paperwork stuff you can handle later.

[Author]

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