Nov 10, 2013, 11:26 am
Last edit by: mcdullhk88
Dead as of 10/13/14
FAQ's
Is Amazon Payments treated as a cash advance? No CC issuer has been reported as treating an AP transaction as a cash advance unless the sender selected "Payment is for Cash Advance" on the Send Money screen.
What does it mean when your payment is "pending"? Your payment will be reviewed. We are unsure whether this review is done by a human or computer. It should take less than 24 hours but is usually within minutes.
How should you describe your payment? "Goods or services" will allow you to charge with a CC and it will not be treated as a cash advance. Note: If you choose cash advance, it may be treated as such by your CC issuer; always choose Goods/Services. There is no reason to put anything in the optional description field - leave it blank.
What is the monthly limit for sending CC payments? $1,000 per calendar month per AP account
What is the monthly limit for receiving CC payments? $1,000 per calendar month per AP account
What if it is not allowing me to send/receive more than $500 or any at all? You probably have not verified your bank and/or added a CC. In order to get the full $1,000 allowance for sending and receiving you must have a bank verified AND a CC added to your account as a payment method.
Does AP qualify for special spending categories? Specifically it qualifies for Discover's (usually 4th quarter) category of online purchases but so far, not Chase's "5% CB on Amazon.com purchases." Refer to thread for other options.
Can you get shutdown? Yes.
How do you get shutdown? No one knows. Anecdotes are found throughout the thread. Some suspicious behavior that MIGHT get your AP account(s) shut down is listed below.
Which transaction is most advisable? A -> B -> C -> A (see here)
Are any fees charged during this process? No, not by Amazon Payments. If your transaction is treated as a cash advance by your card issuer--fees are possible. Beware and always double check that goods/services is selected!
Can you liquidate Amazon GC via AP? NO!
Can you liquidate other gift cards via AP? Yes. Note that you cannot liquidate the full value of a GC because amazon places a $1 hold while it verifies the validity of the GC. You can sometimes (not always) avoid the hold by entering an incorrect expiration date for the GC when adding it to your AP account, and after you have added it, go to "Edit my account settings," then to "Add edit or delete my credit cards" and edit the expiration date there.
When does the month end? It appears as if Amazon is on pacific time, so midnight PDT/PST is when the month resets.
It bears repeating that no one knows the methodology amazon uses to police AP transactions, determines which transactions violate its T&Cs, or identifies violators. However, various people in this thread and elsewhere have confirmed that their AP account(s) were shut down for the following reasons:
Additionally, we have updated the terms and conditions of our User Agreement (https://payments.amazon.com/help/Personal-Accounts/User-Agreement-Policies/User-Agreement) that apply to your use of the products and services provided by Amazon Payments. Our updated User Agreement revises certain terms (including, among other things, the elimination of person-to-person payments). Our new User Agreement will become effective on October 13, 2014, which is more than 30 days from when we first posted our updated User Agreement. By continuing to use our services after October 13, 2014, you are agreeing to be bound by the terms and conditions of our new User Agreement.
Is Amazon Payments treated as a cash advance? No CC issuer has been reported as treating an AP transaction as a cash advance unless the sender selected "Payment is for Cash Advance" on the Send Money screen.
What does it mean when your payment is "pending"? Your payment will be reviewed. We are unsure whether this review is done by a human or computer. It should take less than 24 hours but is usually within minutes.
How should you describe your payment? "Goods or services" will allow you to charge with a CC and it will not be treated as a cash advance. Note: If you choose cash advance, it may be treated as such by your CC issuer; always choose Goods/Services. There is no reason to put anything in the optional description field - leave it blank.
What is the monthly limit for sending CC payments? $1,000 per calendar month per AP account
What is the monthly limit for receiving CC payments? $1,000 per calendar month per AP account
What if it is not allowing me to send/receive more than $500 or any at all? You probably have not verified your bank and/or added a CC. In order to get the full $1,000 allowance for sending and receiving you must have a bank verified AND a CC added to your account as a payment method.
Does AP qualify for special spending categories? Specifically it qualifies for Discover's (usually 4th quarter) category of online purchases but so far, not Chase's "5% CB on Amazon.com purchases." Refer to thread for other options.
Can you get shutdown? Yes.
How do you get shutdown? No one knows. Anecdotes are found throughout the thread. Some suspicious behavior that MIGHT get your AP account(s) shut down is listed below.
Which transaction is most advisable? A -> B -> C -> A (see here)
Are any fees charged during this process? No, not by Amazon Payments. If your transaction is treated as a cash advance by your card issuer--fees are possible. Beware and always double check that goods/services is selected!
Can you liquidate Amazon GC via AP? NO!
Can you liquidate other gift cards via AP? Yes. Note that you cannot liquidate the full value of a GC because amazon places a $1 hold while it verifies the validity of the GC. You can sometimes (not always) avoid the hold by entering an incorrect expiration date for the GC when adding it to your AP account, and after you have added it, go to "Edit my account settings," then to "Add edit or delete my credit cards" and edit the expiration date there.
When does the month end? It appears as if Amazon is on pacific time, so midnight PDT/PST is when the month resets.
It bears repeating that no one knows the methodology amazon uses to police AP transactions, determines which transactions violate its T&Cs, or identifies violators. However, various people in this thread and elsewhere have confirmed that their AP account(s) were shut down for the following reasons:
- Associating one credit card number with more than one AP account (Be Careful if authorized user card has the same number as the primary card holder - in some instances the CC numbers are completely different)
- Associating one bank account with more than one AP account
Amazon Payments
Dec 22, 2011, 11:47 am
#106
Join Date: Aug 2011
Programs: many
Posts: 1,437
If you are doing so via multiple sources, this can be an issue.
Dec 22, 2011, 12:23 pm
#109
Join Date: Jan 2010
Location: SMF, OGG
Programs: UA MM, Alaska Airlines MVP
Posts: 197
There are conflicting reports on here that say the gift limit is 11k and 13k. Can anyone confirm this? which one?
For those of us who are doing 12x$1000 obviously this could make a difference in our habits.
For those of us who are doing 12x$1000 obviously this could make a difference in our habits.
Dec 22, 2011, 12:30 pm
#110
Join Date: May 2010
Location: NJ
Posts: 1,389
Dec 22, 2011, 1:32 pm
#111
Join Date: Oct 2011
Location: North Carolina
Posts: 613
There is a LOT of BS in this thread.
Gifts to spouses are basically UNLIMITED if your spouse is a U.S. citizen.
"If your spouse is a U.S. citizen, then due to the unlimited marital deduction you can gift any amount to your spouse without incurring any federal gift tax or state gift tax consequences as long as the gift is of a present interest.
If your spouse isn't a U.S. citizen, then you are given an annual exclusion from gift taxes for gifts of a present interest made to your noncitizen spouse. In 2011 the annual exclusion from gift taxes for gifts made to a noncitizen spouse is $136,000, and this amount will increase to $139,000 in 2012."
You can read more about the gift tax and estate tax here: http://www.irs.gov/publications/p950...blink100099451
Gifts to spouses are basically UNLIMITED if your spouse is a U.S. citizen.
"If your spouse is a U.S. citizen, then due to the unlimited marital deduction you can gift any amount to your spouse without incurring any federal gift tax or state gift tax consequences as long as the gift is of a present interest.
If your spouse isn't a U.S. citizen, then you are given an annual exclusion from gift taxes for gifts of a present interest made to your noncitizen spouse. In 2011 the annual exclusion from gift taxes for gifts made to a noncitizen spouse is $136,000, and this amount will increase to $139,000 in 2012."
You can read more about the gift tax and estate tax here: http://www.irs.gov/publications/p950...blink100099451
Last edited by JATR4; Dec 22, 2011 at 1:40 pm Reason: Added content
Dec 22, 2011, 1:40 pm
#112
Join Date: Oct 2009
Location: Land of the parrots and parrotheads
Programs: Several dozen
Posts: 4,820
Not so worried about spouses, but I do recall from the coin game that lots of people have significant others. And the amount of significant others is often significant. To do volume takes more than one spouse with an SS#. Anything less than volume is not very time/cost effective?
While gifts to a US citizen spouse may be unlimited, the true limitation will be the amount that sets off a cardinal's tripwire. Massive amounts of automated low volume, low net cost transfers under the tripwires would be the optimal strategy.
While gifts to a US citizen spouse may be unlimited, the true limitation will be the amount that sets off a cardinal's tripwire. Massive amounts of automated low volume, low net cost transfers under the tripwires would be the optimal strategy.
There is a LOT of BS in this thread.
Gifts to spouses are basically UNLIMITED if your spouse is a U.S. citizen. But
"If your spouse isn't a U.S. citizen, then you are given an annual exclusion from gift taxes for gifts of a present interest made to your noncitizen spouse. In 2011 the annual exclusion from gift taxes for gifts made to a noncitizen spouse is $136,000, and this amount will increase to $139,000 in 2012."
You can read more about the gift tax and estate tax here: http://www.irs.gov/publications/p950...blink100099451
Gifts to spouses are basically UNLIMITED if your spouse is a U.S. citizen. But
"If your spouse isn't a U.S. citizen, then you are given an annual exclusion from gift taxes for gifts of a present interest made to your noncitizen spouse. In 2011 the annual exclusion from gift taxes for gifts made to a noncitizen spouse is $136,000, and this amount will increase to $139,000 in 2012."
You can read more about the gift tax and estate tax here: http://www.irs.gov/publications/p950...blink100099451
Last edited by AlohaDaveKennedy; Dec 22, 2011 at 1:45 pm
Dec 22, 2011, 1:55 pm
#113
Join Date: Oct 2011
Location: North Carolina
Posts: 613
Not so worried about spouses, but I do recall from the coin game that lots of people have significant others. And the amount of significant others is often significant. To do volume takes more than one spouse with an SS#. Anything less than volume is not very time/cost effective?
While gifts to a US citizen spouse may be unlimited, the true limitation will be the amount that sets off a cardinal's tripwire. Massive amounts of automated low volume, low net cost transfers under the tripwires would be the optimal strategy.
While gifts to a US citizen spouse may be unlimited, the true limitation will be the amount that sets off a cardinal's tripwire. Massive amounts of automated low volume, low net cost transfers under the tripwires would be the optimal strategy.
From the IRS website:
"The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.
The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift."
But there is also the unified credit.
Unified Credit (Applicable Credit Amount)
"A credit is an amount that reduces or eliminates tax. The unified credit applies to both the gift tax and the estate tax and it equals the tax on the applicable exclusion amount. You must subtract the unified credit from any gift or estate tax that you owe. Any unified credit you use against gift tax in one year reduces the amount of credit that you can use against gift or estate taxes in a later year.
Beginning in 2011, the amount of unified credit available to a person will equal the tax on the basic exclusion amount plus the tax on any deceased spousal unused exclusion (DSUE) amount. The DSUE is only available if an election was made on the deceased spouse's Form 706.
The unified credit on the basic exclusion amount for 2011 is $1,730,800 (exempting $5 million from tax) and is $1,772,800 for 2012 (exempting $5,120,000 from tax).
The following table shows the unified credit (recalculated at current rates) for the calendar years in which a gift is made or a decedent dies after 2001."
Understand now?
Last edited by JATR4; Dec 22, 2011 at 1:59 pm Reason: Added content
Dec 22, 2011, 11:35 pm
#114
Join Date: Feb 2010
Posts: 63
Not sure any of these are actually gifts since you expect something (the full value) in return.
From the IRS website:
"The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.
The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift."
From the IRS website:
"The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.
The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift."
Dec 23, 2011, 1:56 am
#115
Join Date: Sep 2009
Posts: 1,758
The gift tax is paid by the person sending the payments. The 1099 is issued to the person receiving the payments. One has nothing to do with the other.
Dec 23, 2011, 8:30 am
#116
Join Date: Oct 2011
Location: North Carolina
Posts: 613
The gift tax doesn't affect the recipient--only the giver. And it affects the giver's unified credit. The unified credit would apply IF it were a gift--which it isn't.
"The unified credit on the basic exclusion amount for 2011 is $1,730,800 (exempting $5 million from tax) and is $1,772,800 for 2012 (exempting $5,120,000 from tax)."
Do you understand the unified credit?
Last edited by JATR4; Dec 23, 2011 at 9:01 am Reason: Added information.
Dec 23, 2011, 10:01 am
#117
Join Date: Sep 2009
Posts: 1,758
Dec 23, 2011, 10:40 am
#118
Join Date: Sep 2011
Posts: 385
It's not a gift since you expect to get the money back. No 1099 required even if it were a gift. The form for gifts is Form 709 and it is explained here: http://www.irs.gov/pub/irs-pdf/i709.pdf
The gift tax doesn't affect the recipient--only the giver. And it affects the giver's unified credit. The unified credit would apply IF it were a gift--which it isn't.
"The unified credit on the basic exclusion amount for 2011 is $1,730,800 (exempting $5 million from tax) and is $1,772,800 for 2012 (exempting $5,120,000 from tax)."
Do you understand the unified credit?
The gift tax doesn't affect the recipient--only the giver. And it affects the giver's unified credit. The unified credit would apply IF it were a gift--which it isn't.
"The unified credit on the basic exclusion amount for 2011 is $1,730,800 (exempting $5 million from tax) and is $1,772,800 for 2012 (exempting $5,120,000 from tax)."
Do you understand the unified credit?
Dec 23, 2011, 12:37 pm
#119
Original Member
Join Date: May 1998
Posts: 1,139
If someone receives a Form 1099 as a result of receiving back $100,000 of his own cash (whether he received it back from himself, his spouse, or an individual to whom he/she is not married), that someone has to report $100,000 of gross income on his tax return. There is no "deduction" line on the tax return for $100,000 "gift received" so the gift argument is useless.
There are plenty of "deduction" lines for basis and commissions, which is what a "normal" seller uses. If a real seller gets a $100,000 Form 1099 for selling property on Amazon that cost him $95,000, he reports the $100,000 as gross income and the $95,000 as basis, giving him a $5,000 profit.
The $100,000 on the Form 1099 has to be reported as gross income, otherwise the IRS will send a notice and a tax bill. The key is reporting the offsetting "deduction". Most of us would argue that someone who uses a service such as this to send himself $100,000 of his own money, whether that is done using a friend or not, is entitled to a $100,000 deduction for basis, resulting in $0 of taxable income.
There are two problems with the receipt of a Form 1099:
1. Filling out a Schedule C with the exact same amount of gross income and same amount of offsetting deduction, i.e. a taxable income of $0 every year looks strange, and
2. It raises the unanswerable question as to whether the value of the miles / points / cash back reward is taxable.
So it is better if none of use receives a Form 1099 for personal payments, but we can't keep the sender from doing so, because they can't distinguish between the guy who sold $100,000 of product and the guy who managed to send $100,000 of his own cash to himself. I wasn't able to use Amazon or Serve to that level, so I won't get a Form 1099.
Dec 23, 2011, 12:46 pm
#120
Join Date: Apr 2009
Posts: 178
Also the whole discussion started with the requirement of social security numbers by Amazon payments. I was asked for it also. And I didn't receive a single penny with my account. I only used it to pay. So I think it's not an indication that Amazon will produce 1099s for people who don't receive $20k or 200 payments.
Exactly. Plus it is NOT a gift and who-ever started that silliness did a disservice. Even if someone mischaracterizes the transfer as a gift, it doesn't solve the problem, which is the receipt of a Form 1099 showing gross income.
If someone receives a Form 1099 as a result of receiving back $100,000 of his own cash (whether he received it back from himself, his spouse, or an individual to whom he/she is not married), that someone has to report $100,000 of gross income on his tax return. There is no "deduction" line on the tax return for $100,000 "gift received" so the gift argument is useless.
There are plenty of "deduction" lines for basis and commissions, which is what a "normal" seller uses. If a real seller gets a $100,000 Form 1099 for selling property on Amazon that cost him $95,000, he reports the $100,000 as gross income and the $95,000 as basis, giving him a $5,000 profit.
The $100,000 on the Form 1099 has to be reported as gross income, otherwise the IRS will send a notice and a tax bill. The key is reporting the offsetting "deduction". Most of us would argue that someone who uses a service such as this to send himself $100,000 of his own money, whether that is done using a friend or not, is entitled to a $100,000 deduction for basis, resulting in $0 of taxable income.
There are two problems with the receipt of a Form 1099:
1. Filling out a Schedule C with the exact same amount of gross income and same amount of offsetting deduction, i.e. a taxable income of $0 every year looks strange, and
2. It raises the unanswerable question as to whether the value of the miles / points / cash back reward is taxable.
So it is better if none of use receives a Form 1099 for personal payments, but we can't keep the sender from doing so, because they can't distinguish between the guy who sold $100,000 of product and the guy who managed to send $100,000 of his own cash to himself. I wasn't able to use Amazon or Serve to that level, so I won't get a Form 1099.
If someone receives a Form 1099 as a result of receiving back $100,000 of his own cash (whether he received it back from himself, his spouse, or an individual to whom he/she is not married), that someone has to report $100,000 of gross income on his tax return. There is no "deduction" line on the tax return for $100,000 "gift received" so the gift argument is useless.
There are plenty of "deduction" lines for basis and commissions, which is what a "normal" seller uses. If a real seller gets a $100,000 Form 1099 for selling property on Amazon that cost him $95,000, he reports the $100,000 as gross income and the $95,000 as basis, giving him a $5,000 profit.
The $100,000 on the Form 1099 has to be reported as gross income, otherwise the IRS will send a notice and a tax bill. The key is reporting the offsetting "deduction". Most of us would argue that someone who uses a service such as this to send himself $100,000 of his own money, whether that is done using a friend or not, is entitled to a $100,000 deduction for basis, resulting in $0 of taxable income.
There are two problems with the receipt of a Form 1099:
1. Filling out a Schedule C with the exact same amount of gross income and same amount of offsetting deduction, i.e. a taxable income of $0 every year looks strange, and
2. It raises the unanswerable question as to whether the value of the miles / points / cash back reward is taxable.
So it is better if none of use receives a Form 1099 for personal payments, but we can't keep the sender from doing so, because they can't distinguish between the guy who sold $100,000 of product and the guy who managed to send $100,000 of his own cash to himself. I wasn't able to use Amazon or Serve to that level, so I won't get a Form 1099.