Amid all the headlines over a $130,000 payment porn star Stormy Daniels received from an attorney representing President Donald Trump, there’s one party not mentioned.
That would be the Internal Revenue Service. Uncle Sam will likely want to collect taxes on the money.
Daniels, whose real name is Stephanie Clifford, filed suit on March 6 against Trump in a Los Angeles court, seeking to void a nondisclosure agreement that would keep her from discussing an “intimate relationship” she says she had with the president more than 10 years ago.
Her lawyer claimed that the agreement isn’t valid because Trump never signed it. (The lawsuit and the nondisclosure agreement are available here, via NBC News.)
As part of this agreement, dated Oct. 28, 2016, Daniels allegedly received $130,000 from a company called Essential Consultants LLC. Trump’s attorney Michael D. Cohen has reportedly admitted to facilitating a payment in that amount to Daniels.
“The first thing going into it is, ‘What is this settlement for?” said Jeffrey Levine, CEO and director of financial planning at BluePrint Wealth Alliance in Garden City, New York.
“When you get into the reasons why you receive money in a settlement, the taxation will depend on the reason behind it,” he said.
Here are the taxes that may be involved in these kinds of transactions.