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Is money received for giving plasma taxable?

joyztoy
Level 2

I have a tax client that gives plasma and receives payment, $2125 for 2020.

No 1099 is received to document payment.  I have heard this go both ways, and I want to make sure I do his return properly.

Thanks for any help!

Joy

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PATAX
Level 9

Why would it not be? You stated that it could go either way, therefore do you not think it would be better to take a conservative approach and record it as taxable income on the clients return? Just my opinion.

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The-Tax-Lady
Level 8

All income is supposed to be reported, even if no form is issued. That particular industry is very poor at reporting income properly and at times leads the donor to believe it is a charitable donation and monies received are tax exempt.

joyztoy
Level 2

 Thank you for your assistance!

 

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PATAX
Level 9

Why would it not be? You stated that it could go either way, therefore do you not think it would be better to take a conservative approach and record it as taxable income on the clients return? Just my opinion.

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joyztoy
Level 2

Thank you for your assistance! 

My gut feeling is to report, but I was having a hard time finding support on the subject as I was finding conflicting opinions and nothing really concrete.

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qbteachmt
Level 15

They won't send a 1099-Misc for payments made by PrePaid Card systems. When they pay by other than cash or check, the payor doesn't need to report it. The Payment Processor would be reporting it via 1099-K, and the threshold is $20,000 and 200 transactions.

This is Other Income. it doesn't "go either way" because all income is reportable and taxable, even if from an illegal activity. Only explicitly exempt income is not taxable.

And this is not a Donation. The fluid you sold to BioLife is not you, donating. There are arguments made that you are being paid for your Time, but that would be taxable as well. And Pub 526 has this:

Not Deductible as Charitable Contribution:

Value of your time or services

Value of blood given to a blood bank

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