[Justa]

Should be hit by the gift tax. So about a third or 280k left. Then state taxes take another %. So maybe he ends up with 220k.

[antceecee]

Thanks… I thought there would be gov getting their cut.

[MeanWestTexan]

The gift tax is taxed to the giver.

It also only applies to large donations; I believe $25k. This is not a large gift. Rather it is lots of small gifts.

I do believe gifts to this platform do not qualify as tax deductible, so that’s where you get taxed.

[sipow]

Recipients don’t pay the gift tax. The donor has to pay the gift tax. Seems very odd, but that’s the way it is. But that’s only if the donor gives more than the limit to a single person ($17k in 2023). So as long as no single donor gave more than $17k, gift tax doesn’t apply.

Also there is no state income tax in Nevada so that doesn’t come into play either.

The money would be treated as income and he has to pay the Federal income tax. Depending on his other income that’s going mean most of the 400k gets taxed at 24%, so he would keep a bit over $300k.

[sipow]

Actually I was mistaken about the income tax. Donations via GoFundMe or similar fund raisers are considered personal gifts and the recipient is not taxed.

Any individual donor who gave more than $17k would have to pay gift taxes - but there is a good chance that no one gave that much. In either case he keeps the $400k tax free.

[Angelino97]

I think it's the giver who's hit by the gift tax. But it's the giver's choice whether he wants to pay a gift tax in addition to the gift.

If the giver pays a gift tax, the recipient owes nothing. If the giver chooses not to pay a gift tax, the recipient owes income tax on it.