Sugar baby blogger ‘College SB’ asked the sugar family for advice on legal matters, and sugar daddy blogger ‘IRLSD’ (in real life sugar daddy) came forward with his:
College SB: I have a question that pertains to legal matters. Say my SD is giving me 4k a month and I want to put half (2k) of that in the bank in a savings account monthly. . . what legal/inquisitive issues may arise?
IRLSD: College SB, the previous blog discussed this in detail. To summarize things, if your SD is married, giving charitably to his poor mistress has been ruled to be exempt from tax by the courts, but he likely does not want the IRS snooping around the issue or re-trying its luck in court. Technically, anything you do to hide a cash transaction (e.g. breaking it down into smaller parcels) is money laundering and illegal in and of itself, even if the source of the money is legit (and the SB will be in trouble for that, not the SD). Banks are obligated to report any suspicious activity over $2,000. But remember that every bank transaction leaves a permanent trace and the government, thanks to these anti-terror laws, pretty much gets to see every banking transaction. So even if you deposit $100 a day, our government will know that even though the bank will never file a Suspicious Activity Report.
You can take the cash and spend whatever you can in cash. You can buy money orders (less than $2000 a day is not reportable) from the post office or Wal Mart or wherever (NOT the free money order your bank provides, because they will register the cash in your account and then buy the money order from the money in your account) and use money orders to pay for rent, credit card bills, whatever. I know it’s inconvenient, but such is life. And of course, you can deposit small amounts (well below 2K), but the IRS can come along and ask you where you got the money.
If you call it a gift, then if it amounts to more than 13K per year your SD will have to report it on his gift tax return, and I can guarantee you that he won’t want to put your name on an official document his wife has to sign and then file that with the IRS. And I can also guarantee you that if the IRS comes around asking questions from a married SD, the SB will be history quick, so tread carefully.