Just wanted to chime in as someone who dealt with this exact scenario two years ago. The advice here is spot-on - you definitely need to report the full 1099-K amount and then deduct your losses separately if you itemize. One thing I'd add is to check if your gambling sites provide annual win/loss statements. Most legitimate online poker and sports betting sites will generate these for you if you request them, and they're incredibly helpful for documenting your actual losses. I had to contact customer service for a couple of sites, but they were able to provide detailed breakdowns that made filing much easier. Also, if you're thinking about using any of the services mentioned here, just make sure you understand the costs upfront. Sometimes the stress of dealing with tax issues makes spending money on help seem worth it, but you want to make sure it actually saves you money in the long run. Good luck with your filing!

I'm dealing with a similar situation but with a twist - I got a 1099-K from Venmo for what appears to be a mix of gambling winnings AND some legitimate freelance work I did. The gambling portion represents maybe 60% of the total amount on the form. Has anyone dealt with a mixed-use 1099-K like this? I'm wondering if I need to somehow split the reporting between Schedule C (for the freelance income) and Schedule 1 (for the gambling winnings), or if there's a different approach I should take. The Venmo transaction descriptions don't always make it super clear which payments were for what, so I'm trying to figure out the best way to document this split if the IRS ever asks. Also, for the gambling portion, I'm definitely net negative like the original poster, but the freelance work was legitimate income. This seems to complicate things even more in terms of how to handle the deductions and whether itemizing makes sense.

I have a client who owes tax debt for 2022-2024 for $13000, and I am trying to prepare an OIC for them as Doubt of Collectability, as well as a low-income certification. Tax liability is SE due to being a freelance writer on Schedule C who is unmarried, has no car or any assets, and only made $10875.00 this year. Her grandfather helps her pay her half of the utilities and helps with other things she needs since she isn't paid regularly. This is my first one, and after entering all the income for the RCP, it only shows 336 future income. I was wondering what a reasonable offer should be. Since it is a Schedule C, I would send 6 months of bank statements, correct?

Based on your client's situation, an offer around $336-500 would be reasonable since your RCP calculation shows $336 in future income and minimal assets. For someone making $10,875 annually with no significant assets, this falls well within acceptable parameters for Doubt as to Collectibility. A few important points for your first OIC: 1. Yes, include 6 months of bank statements for Schedule C income - the IRS wants to see the irregular income pattern that's typical for freelancers. 2. Document the grandfather's assistance carefully. Since he's helping with utilities and necessities, make sure to show this isn't "income" to your client but genuine family support for basic living expenses. 3. The low-income certification is smart here - with income at $10,875, she likely qualifies and this waives the application fee and initial payment requirements. 4. Consider going slightly above your RCP calculation (maybe $400-450) to show good faith and account for any minor assets or income the IRS might value differently than you did. 5. Include a detailed hardship letter explaining how the irregular freelance income makes it impossible to maintain consistent payments, and how family assistance is necessary just for basic survival. The key is showing that even your minimal offer represents her true ability to pay given the circumstances. Good luck with your first OIC!

Wait, I thought capital gains tax is like 15%? If u have a $20k gain that would be $3k in tax. R people saying u don't have to pay anything at all???

As someone who just went through this exact process, I can confirm what others have said about the Section 121 exclusion being a lifesaver! Just wanted to add a couple practical tips from my recent experience: 1) Make sure you can prove you actually LIVED in the home as your primary residence for 2 years, not just owned it. The IRS looks at things like voter registration, driver's license address, where you received mail, etc. 2) If you're cutting it close on the 2-year mark, count carefully. The IRS uses the exact date - so if you bought on March 15th, you need to wait until at least March 15th two years later to qualify for the full exclusion. 3) Keep your closing documents from when you purchased! You'll need them to calculate your basis properly when you file taxes next year. With only $20k in gains and being married, you're definitely well under the $500k exclusion limit. Sounds like you should owe zero capital gains tax if everything checks out. Good luck with your move!

This is a great discussion! I've been dealing with a similar situation in my auto detailing business. We offer a 30-day satisfaction guarantee, but I've been unclear about how to properly document these expenses. One thing I learned from my accountant is that you want to make sure your warranty policy is written down and dated before you start applying it. The IRS likes to see that these aren't just random acts of generosity but part of a legitimate business strategy. Also, keep detailed records of each warranty claim - what the issue was, how much it cost to fix, and reference your policy. For those mentioning the distinction between warranty vs goodwill expenses - that's spot on. I track mine separately because it helps me analyze which approach actually drives more repeat business. Sometimes a $50 goodwill gesture brings back a customer who spends $500 over the next year, while warranty claims might just be pure cost with no additional revenue. Has anyone here had experience with the IRS actually questioning warranty deductions during an audit? I'd love to know what kind of documentation they typically want to see.

This thread has been really helpful! I'm in a similar boat with my small appliance repair shop. One thing I'd add is that if you do decide to expand your warranty coverage, consider creating different tiers or categories rather than a blanket "we'll fix anything" policy. For example, we have three levels: manufacturing defects (free), minor customer damage like scratches or dents (50% cost), and major damage like drops or liquid spills (25% discount from normal repair price). This way you're still providing excellent customer service while managing costs. From a tax perspective, all of these are still legitimate business expenses since they're part of our documented pricing structure. It also makes it easier to track which types of warranty work actually drive customer loyalty versus which ones are just eating into profits. Has anyone tried implementing a tiered approach like this? I'm curious if it's been effective for other repair businesses.

Just wondering, has anyone e-filed Form 709? Or do you have to paper file these gift tax returns? The IRS website isn't super clear on this.

This is exactly the kind of confusion that trips up so many people with gift splitting! Just to add some practical advice from my experience: when you're filling out both forms, make sure you use the exact same description of the gift on both returns. We described our gift slightly differently on each form and got a letter from the IRS asking for clarification. Also, don't forget that the filing deadline for Form 709 is April 15th (or October 15th if you get an extension), but you can't extend the time to pay any gift tax that might be due. In your case with the $60k gift, after splitting you'll each have $12k that counts against your lifetime exemption ($30k - $18k annual exclusion = $12k each), but no actual tax due unless you've already used up a big chunk of your $13.61M lifetime exemption. One more tip: keep detailed records of the gift (bank records, closing documents if it was for the house down payment, etc.) with your tax files. The IRS loves documentation when it comes to large gifts!