This is a really common confusion! I had the exact same worry when I hired someone on Fiverr for graphic design work last year. The key thing to remember is that as an individual consumer (not a business), you don't have any 1099 filing obligations at all, regardless of the amount you spend. The $600 threshold that your accountant friend mentioned only applies to businesses paying independent contractors directly. Since you paid through Fiverr's platform, they handle all the tax reporting responsibilities. Fiverr will issue appropriate forms (like 1099-K) to sellers who meet their reporting thresholds. Your situation is no different from buying something on Amazon or eBay - you're a consumer making a purchase through a marketplace platform. The platform manages the tax obligations between themselves and their sellers. You can focus on your own tax prep without worrying about issuing any forms to the artist!

This thread has been incredibly helpful! I was in almost the exact same situation - commissioned artwork through Fiverr for about $650 and my tax preparer mentioned the 1099-NEC requirement. I was panicking thinking I'd have to somehow get the artist's SSN or EIN to file forms. Reading through everyone's explanations really clarified the difference between being a business paying contractors directly versus being a consumer using a marketplace platform. The key distinction seems to be that platforms like Fiverr act as the middleman and handle all the tax reporting obligations themselves. I feel much more confident going into tax season now knowing I don't need to worry about issuing any forms for my Fiverr purchases. It's reassuring to see so many people had similar concerns and got confirmation from various sources (IRS agents, tax software, etc.) that individual consumers don't have these filing requirements when using third-party platforms.

One strategy that hasn't been discussed yet is considering a charitable remainder trust (CRT) if you have any philanthropic goals. This could be particularly effective given your large capital gain situation. With a CRT, your S-corp could donate the appreciated real estate to the trust, receive an immediate tax deduction, and then the trust sells the property without paying capital gains tax. You'd receive income payments from the trust for a specified period (or life), and the remainder goes to charity. This strategy works especially well when you're facing a large one-time gain like your projected $175K. The immediate charitable deduction could offset a significant portion of other income, and you'd convert the lump-sum gain into a stream of income over time. The downside is that you don't retain ownership of the property, and there are minimum payout requirements and administrative costs. But given the size of your gain and the limited time for other strategies, it might be worth exploring alongside the 1031 exchange options. You'd need to work with an attorney who specializes in charitable planning, but the potential tax savings could be substantial. Even if you're not particularly charitably inclined now, you might find it attractive compared to writing a massive check to the IRS. Just another tool to consider as you're evaluating all your options. The key is getting professional advice quickly since most of these strategies require advance planning and can't be implemented at the last minute.

I went through almost the exact same situation two years ago - S-corp owning commercial real estate that we needed to sell. The tax hit was brutal, but I learned some valuable lessons that might help you. First, definitely explore the 1031 exchange route while you still can. Even though it's S-corp owned property, it absolutely can work. The key is getting a qualified intermediary involved NOW, before you sign anything with buyers. I made the mistake of waiting too long and missed this opportunity entirely. Second, regarding your negative AAA balance - while it won't directly offset the gain from the property sale, it will affect how you can take distributions afterward. Make sure your new tax professional understands how this works because it can create some unexpected complications if not handled properly. One thing I wish I had done was a cost segregation study earlier in the ownership period. We did one right before selling and it helped somewhat, but if we'd done it years ago and been taking accelerated depreciation all along, we would have had more flexibility with the tax planning. The depreciation recapture is going to be painful - mine ended up being about 30% of the total gain when you factor in federal and state taxes. But don't let that discourage you from exploring all your options. Even saving 20-30% on the total tax bill makes a huge difference. My biggest recommendation: budget for good professional help immediately. I spent about $8K on a specialized tax attorney and qualified intermediary consultations, but it saved me over $40K in taxes through proper structuring. Worth every penny. Time is your enemy here, so don't delay like I did. Start making calls this week.

Just make sure your parents write "GIFT" in the memo line of the check they give you and keep good records. My uncle is an accountant and says that's important for documentation if the IRS ever questions it.

Great question! I went through the exact same situation last year when my parents helped with my down payment. The good news is that as the gift recipient, you won't owe any taxes on the $45,000 - that's the giver's responsibility, not yours. Here's what you need to know: For 2025, each parent can give you up to $18,000 without any reporting requirements. So together, they could give you $36,000 with zero paperwork. Since you're receiving $45,000, they'll need to file Form 709 (gift tax return) to report the $9,000 excess, but they almost certainly won't owe any actual tax unless they've already given away millions in their lifetime. You can use the full amount for your down payment! Just make sure to get a proper gift letter from your parents for your mortgage lender - they'll require documentation that it's truly a gift and not a loan. Your lender will probably have their own template for this. Don't stress about setting aside money for taxes - you're completely in the clear as the recipient!

This is such a timely question - I'm dealing with the exact same situation with my gaming channel! Based on what I've learned from my accountant, you're absolutely right to start deducting those expenses now even without monetization. The key thing the IRS looks for is "profit motive" - which sounds like you clearly have with your business plan and serious approach. You don't need formal business registration to claim these deductions on Schedule C of your personal return as a sole proprietor. One crucial tip: start documenting EVERYTHING now. I created a simple spreadsheet tracking every expense with date, amount, business purpose, and receipt photo. For those monthly subscriptions like Canva Pro and TubeBuddy, they're perfect examples of "ordinary and necessary" business expenses since they're directly related to content creation. Also consider tracking your time investment - hours spent on video creation, research, learning new skills, etc. This helps demonstrate the business nature of your activity versus just a hobby. The IRS wants to see consistent, profit-directed effort even before revenue starts flowing. The 3-out-of-5-years profit rule others mentioned is real, but don't let it scare you. Many legitimate businesses take time to become profitable, especially in content creation. Your business plan showing the path to monetization through sponsorships will be valuable documentation if ever questioned.

This is such great advice from everyone! I'm in a very similar situation with my DIY home improvement channel - been investing in tools, editing software, and even some basic lighting equipment while building up content before applying for monetization. One thing I'd add that really helped me get organized: I created a dedicated Google Drive folder structure for all my YouTube business documents. I have separate folders for receipts, business planning documents, usage logs for shared equipment, and even screenshots of my analytics showing growth metrics. This makes it super easy to find everything if I ever need to provide documentation. Also, don't forget about mileage if you travel for content! I've been tracking trips to hardware stores for project supplies, driving to filming locations, even trips to pick up equipment. At the current IRS rate of 65.5 cents per mile, those trips add up quickly. I use a simple phone app to track business-related driving. The key thing I've learned is to err on the side of over-documenting rather than under-documenting. Better to have too much supporting evidence than not enough if questions ever come up. Your business plan idea is spot-on - even a simple document showing you've thought through your monetization strategy demonstrates this isn't just an expensive hobby.

Everyone here is focusing on federal taxes, but don't forget to check your state tax rules too. Some states have different rules for casualty and theft losses than the federal government. I live in California and was able to deduct some of my crypto losses on my state return even though I couldn't on federal.

Sorry to hear about your loss - phishing scams are unfortunately way too common in the crypto space. I went through something similar with a fake DeFi protocol last year. One thing that hasn't been mentioned yet is the importance of properly documenting the theft for your records, even if you can't deduct it this year. Keep screenshots of the scam messages, blockchain transaction records showing where your crypto went, any police reports you filed, and timestamps of when everything happened. While current tax law doesn't allow the deduction, tax rules around crypto are still evolving rapidly. Having solid documentation could be valuable if the rules change in the future or if you need to prove the theft occurred for other purposes. Also, make sure you're not accidentally reporting phantom gains on crypto you no longer own when you file - that's a mistake I almost made before my accountant caught it. The suggestions about consulting a crypto tax specialist are spot on. This stuff is complicated enough that generic tax advice often doesn't cover all the nuances.