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This might be a stupid question - What are the tax implications of a domestic money transfer. I share an apartment with 2 more friends, and each month we collect money into my account before paying it off to the owner.

I heard from someone that since my friends are moving money to my account, I'm liable to be taxed by the IRS and thus, I should avoid paying on the behalf of anyone?

Is that true? If yes, what alternatives do I have since our lease agreement says that we need to pay in lumpsum.

Thanks a lot!

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I heard from someone that since my friends are moving money to my account, I'm liable to be taxed by the IRS

Not completely true. If there are large deposits in your account, you may be asked for clarification from IRS. If there is a reasonable justification; in your case the agreement that you are sharing the apartment, the lease deed has all the 3 names, there is explicit mention in lease about how funds are transferred.

Note at times the audit maybe in future for quite a bit of past. Hence you would need to keep the record for quite some time. Alternative arrangements like opening a joint account and making payments from that account may make it easier from record keeping point of view.

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You only need to report INCOME to the IRS. Money which you are paying to a landlord on behalf of someone else is not income.

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