Blood money

If the latter, what is the basis?

And can you move it into your self-directed IRA and then sell it?

S.

should be handled the same way as milk from a cow, no?

snip

Is this tongue-in-cheek?

Several others, you and I discussed some of this last year here. If memory serves, it is illegal to sell blood or plasma. The law views the money paid to the typical blood/plasma donor as compensation for time. I do not see how sale of inventory would fly.

(By "typical" here, I mean a person w/o rare blood yada who makes only a small amount of income from blood donation.)

Also from last year: If this client's son is selling his blood regularly enough, then a Sch. C might be something to consider.

I know of two appellant cases both of which said it was irrelevant as to whether the sale of blood was the sale of a service or a product as in both cases, the income was taxable. No mention of inventory.

United States v. Garber, 607 F.2d 92 (5th Cir. 1979) (en banc). Lary v. United States, 787 F.2d 1538 (11th Cir. 1986)

Well, I only mentioned "inventory" (yes, tongue in cheek) because one fellow maybe 20 or 25 years ago did in fact appeal and try to deduct pro rata amount of food used to replenish the blood sold.

Who mentioned above it was illegal to sell blood or plasma? Not around here. In fact the commercial blood suckers advertise on television.

ChEAr$, Harlan

If you're really interested (still not sure if this thread is in jest or not :-) ), look back at the discussion held a year ago or you can maybe google.

All your questions have been answered in court decisions. There is no charitable deduction for donating blood. What you receive in payment for selling your blood is gross income.

No, it is NOT in jest atall. My real comment was that IRS should require blood banks to issue 1099's for blood "sales." More income more taxes for U S gubmint coffers. As far as I can see, blood banks are either not required to do so, or they choose not to do so.

I was not opining one way or another whether such sales might be construed as regular business activity requiring use of schedule c.

Now do you get it?

ChEAr$, Harlan Lunsford, EA n LA

On Mar 3, 4:23 pm, Harlan Lunsford

The bottom line of your first post is: "So here's the question posed for your opinion. Do the amounts received represent payment for services (in which case a 1099misc is clearly warranted) OR sale of inventory? (grin)." I did not realize your point was to urge a change to IRS practices.

Is a 1099-misc "clearly warranted"? Would it help federal revenues to promote more tax yada regulation of blood donation compensation? I would be reading up more on non-profits; the additional overhead cost to blood/plasma collecting orgs for preparing 1099-misc's and how they would raise the cost charged to hospitals to pay for this who in turn will raise charges to patients; the income tax bracket of the typical blood yada seller and so the likely non-effect of raising federal revenues through stricter regulation of income due to blood donor sales, and so on.

My big concern last year was helping those who are doing with their body whatever menial/manual labor they could and so should, if they donate blood for money regularly and keep records, be allowed to count it towards the Earned Income Tax Credit, pay SS taxes on the income, etc.