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Old 04-23-2019
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Default Paypal taxes in another persons name SSN

Hello i have a Paypal/Ebay account in my fathers name that i have built up over the years due to loosing mine years ago. This year i crossed the threshold 20k/200 and will be paying taxes on the income going forward. His accountant explained that my father has to file schedule C zero out the income and i will take over the tax burden. The account is a premier PP account verified with his SSN in good standing. My plan going forward is to start paying taxes on this account however my father is worried because the account is under his name and his SSN and doesn't want it tied to his income. My question is this do i open a LLC in my name and upgrade the account to a business account? Will this be a problem since his SSN is already attached to this account? I just want to continue to use this account and take over the tax liability without going stealth or starting all over fresh.

Last edited by johndo28; 04-23-2019 at 07:32 AM.
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Old 04-23-2019
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Default Re: Paypal taxes in another persons name SSN

Yes, your plan is solid enough.

Converting the account to an LLC account with an EIN would be the only way to shift the tax burden from your dad to yourself. Because then at the end of the year PP will issue a 1099 with your EIN printed on it rather than your dad's SSN.
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Old 04-23-2019
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Default Re: Paypal taxes in another persons name SSN

what does your father accountant mean by filing schedule c and zero out his income and you pick up his tax burden?
get a copy of schedule C and understand what he has to go thru,I hope you have good recordkeeping with sales ledger,vendor invoice,ebay fees,paypal fees etc.
Is the Ebay account in his name as well?
if there is a home office and vehicle involve,whose home and vehicle is used in running this business?
with son like you,who needs enemy?
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Old 04-23-2019
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Default Re: Paypal taxes in another persons name SSN

Quote:
Originally Posted by phaz0rz View Post
Yes, your plan is solid enough.

Converting the account to an LLC account with an EIN would be the only way to shift the tax burden from your dad to yourself. Because then at the end of the year PP will issue a 1099 with your EIN printed on it rather than your dad's SSN.
are you sure?
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Default Re: Paypal taxes in another persons name SSN

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Originally Posted by agent006140 View Post
with son like you,who needs enemy?
Dam brah, you brutal!

LOL, in all honesty, this should not be a big deal as you seem willing to pay for any tax issues.

Getting it switched to your info would be best, but either way would work.
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Old 04-23-2019
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Default Re: Paypal taxes in another persons name SSN

if Phaz SUGGESTION WORKS,then his father would not have to file schedule C,as he would not get a 1099K .
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Default Re: Paypal taxes in another persons name SSN

Paypal never delete any information registered with the account,your father SSN could stay with your LLC account.
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Old 04-23-2019
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Default Re: Paypal taxes in another persons name SSN

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Originally Posted by agent006140 View Post
are you sure?
Yes, I'm sure.

Once you convert the account to a business account and provide an EIN the EIN would automatically be used on 1099k's even if there's already an SSN on the account. Paypal wouldn't need to send a 1099k for both tax ID's on the account - they would naturally choose the business tax ID since you've told them you're a business.
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Old 04-23-2019
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Default Re: Paypal taxes in another persons name SSN

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Originally Posted by agent006140 View Post
are you sure?
100% positive.
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Old 04-23-2019
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Default Re: Paypal taxes in another persons name SSN

Welcome to the forum OP - all the best as you master stealth

You are in good hands in the thread so far.
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Default Re: Paypal taxes in another persons name SSN

Quote:
Originally Posted by ebaystealth1974 View Post
100% positive.
Whoops. Looks like I replied from the wrong account!
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Default Re: Paypal taxes in another persons name SSN

That's sloppy stealthing!
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Old 04-24-2019
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Default Re: Paypal taxes in another persons name SSN

Quote:
Originally Posted by agent006140 View Post
what does your father accountant mean by filing schedule c and zero out his income and you pick up his tax burden?
get a copy of schedule C and understand what he has to go thru,I hope you have good recordkeeping with sales ledger,vendor invoice,ebay fees,paypal fees etc.
Is the Ebay account in his name as well?
if there is a home office and vehicle involve,whose home and vehicle is used in running this business?
with son like you,who needs enemy?


Yes the ebay and paypal are in my fathers name as i lost my account years ago. He was sent a 1099 from paypal this year because i crossed the threshold. His accountant told him in order for him to not have to include it in his income he has to file a schedule C put the income on there then minus it out so it zero's out and then i have to file taxes and claim that income. He told my dad that I i can't keep doing that every year so i'm going to have to start a LLC as i don't want to loose that account since it has high limits/verified/excellent feedback etc. Vehicle wise i'm the one running the ebay business using my vehicle and home

Thanks for all the responses i'm not trying to go stealth just want to make sure my father doesn't get in trouble with the irs and pay my taxes my going forward
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Old 04-24-2019
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Default Re: Paypal taxes in another persons name SSN

just curious,how does he zero out his schedule C income?
if he has enough expenses to offset the income,then he would have zero income.
or is he going to claim he is doing it for you,so he would transfer the sales to you,I dont recall any way you can do so on a schedule C?
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Old 04-24-2019
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Default Re: Paypal taxes in another persons name SSN

Quote:
Originally Posted by agent006140 View Post
just curious,how does he zero out his schedule C income?
if he has enough expenses to offset the income,then he would have zero income.
or is he going to claim he is doing it for you,so he would transfer the sales to you,I dont recall any way you can do so on a schedule C?

I was wondering the same thing. Cancelling out all the income on a schedule C seems like a good way to be audited.

If I were stuck in this situation I'd ask my dad to include all the business income and expenses on his 2018 tax return (little late for that, lol), report the profits honestly, then give him however much $ he has to pay for your business activity.
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Default Re: Paypal taxes in another persons name SSN

Quote:
Originally Posted by phaz0rz View Post
I'd ask my dad to include all the business income and expenses on his 2018 tax return (little late for that, lol), report the profits honestly, then give him however much $ he has to pay for your business activity.

Phaz0rz nailed it right here ^^^! That's the only option for a decent person to make it right.

Oh, and your dad has a shiity accountant!
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Default Re: Paypal taxes in another persons name SSN

Quote:
Originally Posted by ebaystealth1974 View Post
Phaz0rz nailed it right here ^^^! That's the only option for a decent person to make it right.

Oh, and your dad has a shiity accountant!
Thing is my father doesn't not want to include it on his income since he wasn't the one making the sales and was 125k reported from PP. He's adamant that he doesn't want me using his account if this is going to happen every year and the accountant said he cant do this every year just a 1 time thing so i'm trying to go legit so that he doesn't have to worry about it. Maybe the zeroing out thing i'm misunderstanding but all i know is that the accountant is putting it on his schedule c so it doesn't effect his income. He has his own business and a regular full time job as well if that help's clarify

Here is some info i found on the internet from similar situations:

You will enter the amount of the 1099K as the income. In the Cost of Goods Sold category, you can put the SAME NUMBER so that it zeroes out the Schedule C.


You reported $1m in income and an equal $1m in loss for a net income of $0 (or minimal) for this venture?
Seems like it. The money is OPs as it's his Paypal account, and this is a way to shift the income to the father.
Because he's paying that 1M in income directly to his father. Ops name is on the account but his father is doing all the selling. Therefore, all income is expensed to the father. 0 net income on that venture.
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Default Re: Paypal taxes in another persons name SSN

Quote:
Originally Posted by johndo28 View Post
You will enter the amount of the 1099K as the income. In the Cost of Goods Sold category, you can put the SAME NUMBER so that it zeroes out the Schedule C.

Yeeaaahhhh, NO! IRS would be eating Sunday dinner with you guys.

Phaz0rz gave you the only viable solution for this, going forward. LLC and EIN, to shift the tax burden onto yourself.

This year, you'll do the Schedule C part of your dad's income that YOU put on him, and pay him what he owes because of you.
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Default Re: Paypal taxes in another persons name SSN

Yeah i'm going to start a LLC for sure. I just wanted to make sure PP will use the EIN instead of his SSN which was already answered. Thanks guys for all your help i appreciate it as far as the schedule C thing ill have to talk to his accountant which i'm using as mine anyways. I filed for an extension and prepaid some taxes already so i can have time figure this all out
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Default Re: Paypal taxes in another persons name SSN

Well, if you want the IRS to believe that you had EXACTLY zero profit on 125,000 in sales, you go right on ahead! lol
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Old 04-24-2019
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Default Re: Paypal taxes in another persons name SSN

everyone knows selling on internet ,the margin is slim.even IRS agents know as they also sell on internet or someone in his family does.
It sounds like OP's father has his own business,but he is not reporting his business on schedule C,so the schedule C would just be his Paypal 1099k sales minus expenses.
Expenese could add up,besides cost of good sold,there are mileage deduction of use of the car,phone if there is more than one,office deduction,any home improvement will be prorated ,property tax,supplies,postage,freight in,pc,camera,ISP.Norton security ,misc software/hardware,even the house utilities would be prorated. .
he could end up with a small profit,not zero profit.
but if he ever get audited,it would just be more to audit,I am glad OP is not my son.
one thing his father can do,is to issue 1099 to OP as a contract worker,and pay him whatver the profit is,that will zero out his profit on Schedule C for sure/
say if after all the expenses,his father make 15,000 on schedule C,well then add contract worker and pay his son 15,000,then the bottom line is now zero.
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Old 04-24-2019
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Default Re: Paypal taxes in another persons name SSN

On another forum,.some one suggested using grandparents SSN to open a Paypal account!
Since grandpa and grandma do not need and use Paypal.
how would grandma and grandpa like when they get audited for their home business?
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