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    Mrdvs75's Avatar
    Mrdvs75 Posts: 1, Reputation: 1
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    #1

    Feb 10, 2011, 11:16 PM
    Foreign wire transfers from business friends, Italy. Commission? Gift? Do I report it?
    My question is about foreign wire transfers from an Italian Company. My business partner and I have gained a lot of business for an overseas freind's company. In doing that, the company has sent us money through wire transfer, some of it as thanks, some of it to use to entertain any new prospects. Call it commission, or call it a gift?? They are grateful and they wanted to let us know. They have also sent us incentive payments for any new US clients that we could introduce them to, in the hopes that they get that client. My question is... Do we have to pay taxes or report that in any way? And yes there has been one transfer over $10000. My partner and I are on the bank account jointly and we split everything (the bank account is not a business account). These Italians are friends we have known for years. We are just making them a lot of money. And they are shifting some of their client base our way too. What do we do? We just started doing this in the middle of 2009. And now it 2010 tax time, and I am a little nervous as to what to do here. My buddy already did his taxes, and did not claim any of that money. Will I light him up to IRS if I choose to report this however I am suppose to. PLEASE anyone that can help me out with any legal suggestions or advice would be sooooo appreciated. I am a hard working father of three just trying my best, and I can't shake that up. Thank You!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Feb 11, 2011, 04:29 PM
    Money in excess of $10,000 would be REAL HARD to pass off as just gifts from friends in Italy.

    The IRS would justifiably call it self-employment income on which you must pay at least income taxes and probably self-employement taxes as well.
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