How should sugar babies deal with a large sum of money

There are some sugar daddies secures sugar babies quite a large sum of money. Lots of successful sugar babies may receive a large amounts of money form sugar daddy.

They may search and research for info on what the they should do with this money. Should you file a report for the money? Will you result in a FINTRAC report? How should sugar babies deal with a large sum of money?

The best way to receive receive a large amounts of money form sugar daddy is the method cash, but sometimes it is not possible in this situation.

Beware the scam

First you may scream out scam. If you are first time sugar baby or in a new sugar relationship, you may seriously be questioning this. Do not give any sugar daddy your bank info before you feel the sugar daddy can be trusted or entering an arrangement that feels consistent.

There are some scammers who pretend to be ‘sugar daddies’ to get people’s bank details and trick them into sending them money – a scam known as advance-fee fraud or the 419 scam.

These scammers can raid your money. Don't accept a cashiers check, it can be reversed. If they mention itunes cards, run!

If you know the sugar daddy in person and trust him, get a bank wire or a cashier's check from a bank you can verify the validity of the check with.

Some sugar daddy pay the money through paypal/venmo, then what to do regarding your taxes? First remember that your allowance is a gift, and non-taxable. But it has limitation.

limited to $15,000 per year

It is possible to get gifts from another person, but in the U.S.A. that is limited to $15,000 per year in cash or property.

Once you exceed this number, reporting gifts is the responsibility of the giver. So in the case of a sugar relatinship, any tax reporting liability is the responsibility of the sugar daddy.

Even then, it just needs to be reported in excess of some arbitrary amount the IRS determines.

How should sugar babies deal with large amounts of cash?

Although sugar babies do not owe taxes on sugar payments, they do need to be careful in handling cash deposits that total $10,000 or more.

Specifically, US banks are required to file a report for any cash deposit above $10,000. This report could possibly trigger an investigation, although sugar dating is not illegal, and there are no news reports of any such case.

More subtly, the act of splitting a greater than $10,000 deposit into smaller amounts to avoid this reporting can be a crime, known as structuring.

If an sugar baby's total cash deposits in a week are well below $10,000, then she is unlikely to trigger any reporting, and there should be no issue depositing the money in a bank.

Some sugar babieshave a joint bank account with their parents or partner or have given them access to their account. Rather than trying to explain a series of (hopefully suspiciously large) new deposits, those sugar babies should consider simply opening a separate bank account.

Splitting the transactions into something resembling income

However, without suspiciously splitting the transactions into something resembling income (multiple smaller payments), which could trigger reports from banks, and a CRA investigation, you are left with a wire transfer which will require a large cash transaction report with the receiving bank.

They will want details on the origin and purpose of the funds to meet FINTRAC mandatory reporting requirements.

Splitting the transaction up is possibly illegal, and will look more like income anyway, and could still result in a FINTRAC report, only as a Suspicious Transaction Report or STR.

Suggestion when a sugar baby recive a large sum of money

This is not legal advice, just a suitable work around. Open an account in an offshore jurisdiction, there are many, and the banks will give you a Visa or Visa Debit card.

Funds transferred there. You may need to still satisfy the bank the source is legitimate but depending on jurisdiction the report will not automatically go to CRA.

You are only obliged to report offshore assets in excess of $100K to CRA. You are still obligated to report income, but if it is a gift the principal amount is not reportable income, only interest it generates will be.

At current rates of interest, this will not amount to much, maybe a couple hundred a year, which will be taxable but doesn't affect your total income in a meaningful way. With the Visa/Debit card you can access the funds as needed any time.

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