W P Brown wrote:

- quote -

The general rationale of the courts on this one is pretty
simple--if the *reason* a "gift" is made is because someone
is an employee, then the payment was actually made to
compensate the person for services rendered. The
*relationship* is key here.

A gift is something transferred with no expectation of
repayment, and which is not earned by or due to the
recipient. The courts look not only to "legal" requirements
but also to "moral" expectations both way.

--
Ed Zollars, CPA
Phoenix, Arizona

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Stuart O. Bronstein wrote:
- quote -

And as I note again, employers cannot make gifts, as defined
in federal tax law, to their employees. There are very small
exceptions (Christmas hams, for example). Cash in any amount
is not an exception. Employer payments to employees are
taxable compensation, not gifts.

Regards,
Bill
~~~~
Associate Professor of Accounting
Longwood University
Department of Accounting, Economics & Finance
http://www.longwood.edu/staff/wpbrown/
Opinions expressed by me are mine, not my employer's.


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soschief[at]charter.net (Jim LaBundy) blurted out

- quote -

As many others have noted, gifts are not deductible or
included in the income of the recipient.

There are ways that parents who run their own business may
be able to pay money to their children, deduct it and have
their kids taxed instead. For instance they can hire the
kids as employees. Or they could gift business equipment
and lease it back. But in that case the $10,000 (currently
$11,000) limit does not apply.

Stu

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Frederick Jorden wrote:

- quote -

It's taxable income to the former employee. It may or may
not be deductible by the corporation depending upon related
party rules.

Regards,
Bill
~~~~
Associate Professor of Accounting
Longwood University
Department of Accounting, Economics & Finance
http://www.longwood.edu/staff/wpbrown/
Opinions expressed by me are mine, not my employer's.

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"Jim LaBundy" <soschief[at]charter.net> wrote:

- quote -

Federal income tax was a required course for accounting
majors when I was in school nearly 50 years ago. At that
time, the 1954 code was new stuff and we still had many
references to the 1939 code! At that time, and for all the
time since, I never heard anything about deducting gifts
other than gifts to charitable organizations.

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Phil Marti wrote:
- quote -

"Not in my lifetime." That was my answer once when someone
asked if she could deduct college tuition for her dependent kids.
I explained that that had never been allowed, and would not be
allowed; "not in my lifetime."

Funny, isn't it?

cheer$,
HL, EA in LA

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- quote -

You are confusing a couple different things. You can give up
to $10,000 to ANYONE without having to file a gift tax
return. The gift is NOT deductible by you nor is it taxable
income to the recipient. (If your premise were true,
EVERYBODY would be doing it!!) Will

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Jim LaBundy wrote:

- quote -

Not in my lifetime -- or my parents would have done it.

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"Jim LaBundy" <soschief[at]charter.net> wrote:

- quote -

Gifts to one's child has never been deductible by the parent.

Wayne Brasch, CPA, M. S. Taxation

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- quote -

Not in the past 30 years or so....

- quote -

No way, no how.

Helen, EA in PA
Member of The Tax Gang
President, PA Society of Enrolled Agents
1040EZ and 1040A tax prep at www.1040.com/1040pro

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"Jim LaBundy" <soschief[at]charter.net> wrote

- quote -

Yes

- quote -

No.

- quote -

No

- quote -

It never was true.

- quote -

You've probably confused gift tax laws with income tax laws.

~Charitable~ gifts and contributions are deducted from your income.

You can "gift" up to $11,000 to a child (or even me ;-)) per
year without invoking the need to file a gift tax return.

You can receive any amount as a gift and it wouldn't be
considered income.

--
Paul A. Thomas, CPA, PC
Athens, Georgia
taxman[at]negia.net

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soschief[at]charter.net (Jim LaBundy) wrote:

- quote -

Not sure when (if ever) it was true, but it sure isn't now.
You can make a gift of up to $11,000 without incurring gift
tax. It is not a tax deduction for you, and it is not
taxable income for the child. More than that, you need to
file a gift tax return, though any tax is deferred: it comes
out of your lifetime exclusion.

--
Chris Green

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soschief[at]charter.net (Jim LaBundy) writes:

- quote -

Not in my lifetime. I think you're confused. The only
gifts that have ever been deductible are charitable
contributions.

Phil Marti
Topeka, KS

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soschief[at]charter.net (Jim LaBundy) writes:

- quote -

It was *never* true.

Gifts to individuals are/were *never* deductible for
the giver, and they are/were *never* taxable to the
recipient.

However, the first $11,000 (was $10,000) of per giver per
recipient gifting is exempt from the *gift* tax that would
otherwise be imposed on the *giver*.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Jim LaBundy wrote:

- quote -

Sorry, that's *never* been the law. What you are confusing
is the annual *exemption* from gift tax for gifts of a
present interest. You can give anyone (doesn't have to be
your child) up to $11,000 per year (it's now been inflation
adjusted) and not have to report a taxable gift.

But it does not give you an income tax deduction.

--
Ed Zollars, CPA
Phoenix, Arizona

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Jim LaBundy <soschief[at]charter.net> wrote:

- quote -

I've been in practice for 26 years and I don't recall any
rule like that, at any time, ever.

MTW

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soschief[at]charter.net (Jim LaBundy) wrote:

- quote -

Gifts to individuals, related or not, are not deductible by
the giver nor taxable to the recipient. There is no tax
reporting by either person, as long as the gift does not
exceed $11,000.

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"Jim LaBundy" <soschief[at]charter.net> wrote:

- quote -

I don't recall this ever to be true, and certainly if it was
at one point, hasn't been for a long long time.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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At one time, one could give up to $10,000 to one's child,
and it would be deductible to the parent, though includible
for taxes for the child. Is this still true, and if so,
under which part of Schedule A (if so) would it be included?

Thank you

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