I have a friend that gets discounts on certain products from a company based on a special arrangement the company provided to him. He does not work for the company, he has just been extended this discount.
My friend has purchased multiple items at his special discount for me, and I have sent him money to reimburse him via Paypal Friends and Family. I paid him the exact amount that he spent to purchase the items.
I have sold many of these items, some for a loss, and some for a profit through ebay. I started doing this based on a side business I started with the intent to make a profit.
Does any of what I described cause any potential tax liability issues for him?
Thanks
Tax liability for friend who purchased several items for me?
byu/torpedolife intax
Posted by torpedolife
3 Comments
It doesn’t sound like any income tax liability for him. Are you and him in the same state? Is he paying any sales tax when he buys the item?
Did your friend ask you to find out for him? If not, I wouldn’t worry about it and his taxes. I’ve also never once thought about any repercussions about paying someone for something they bought and were giving to me, let alone tax repercussions of that transaction.
No, none of this is a tax issue for your friend, any more than if you used his Amazon account to buy stuff for yourself and then paid him back the money.