I have a friend from Mexico that asked me to buy flight tickets for him. Its about 2,000 dollars, and he's going to give me the money in cash so I can deposit it in my account and pay my credit card.

Also I've done this a couple times where I go out to a club with a bunch of friends from Mexico and I pay the tab for everybody and they pay me cash. Then I deposit that money into my account so my credit card gets paid. Sometimes the tab goes up to a couple thousand.

Could this turn on a red light for the IRS for me making deposits into my account and not declaring them as income?

It's not really income since I'm only getting paid back but for the IRS it could look like it is.

Thank you!

  • Hi, and welcome to the site! How often are we talking - a few times in a year, a few times in a week? I assume you're a US citizen/resident from your question about the IRS itself - is that the case?
    – Joe
    Commented May 8, 2015 at 19:34
  • Standard warning: be very, very certain that you can trust this friend to pay what they owe. This kind of transaction can easily be the start of a scam.
    – keshlam
    Commented Sep 15, 2015 at 14:28

2 Answers 2


What you are describing is perfectly legal, and is well under the threshold to attract the attention of the IRS ($10K+). The money is not income, because it is repayment for goods provided or a loan made to your friends. I do this myself oftentimes to take advantage of the rewards on my credit cards. With cash to cover expenses coming in immediately from friends/family, there is virtually no risk.

If you are concerned and want to protect against questions in the future about the source of the money, you ought to start keeping records of dates, times, locations, amounts, and the names of people involved when the charges are made. Then track the dates when the cash is deposited into your bank account. That way you can demonstrate the cash flow (Charge -> Repayment -> Deposit) to anyone who needs to know.

  • With the two examples given: amounts of cash into the thousands; it is possible that the bank may still file paperwork if they consider the cash transactions suspicious. So yes writing down the details could be very important. Becasue the bank could see it as money laundering. Commented May 9, 2015 at 10:53

If your friend is paying you same amount as the charge, there should be no problem. If the friend is paying you an amount in excess of the ticket (or in excess of the club tab in the 2nd example), you need to report the excess amount as income.

I would keep the receipts for the purchases, credit card statements, bank statements, and checks/or electronic receipt show your payment of the credit card. If the IRS does question these, you tell them what happened and be able to prove that you made no money off the transaction by providing the statements and receipts.

  • You wouldn't need to report it as income, as long as it was under the gift tax threshold (annually), unless it was something you do for your normal course of business.
    – Joe
    Commented May 8, 2015 at 20:14
  • 1
    @Joe This is not related to the gift tax, which is a requirement on the giver not the receiver of the gift. Commented May 9, 2015 at 10:51
  • Probably a more straightforward case would be that when repaid the exchange rate could be already changed in your benefit Commented Dec 5, 2019 at 4:37

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