Co-workers gift - taxable income?

It seems to me that this is similar to the case of the home down payment assistance "charities", where the funds for the buyer came from the seller through the charity. There was essentially a 1:1 relationship between what the seller "donated" to the "charity" and the payment assistance the buyer received from it.

Last I read, the IRS was cracking down on this:

(I couldn't find a link on the NY Times site. Sorry, Harlan.)

But only up to the amount of his basis in the gift.... or not.

-Mark Bole

Since there were two replies to this, I should say that I was under the impression that the "gifts" were in order to help the recipient pay medical expenses. But, maybe not.

ChEAr$, Harlan Lunsford, EA n LA

And I reckon it goes back to what we learned long ago that somehow congress got into the act, allowing deductions in order to socially engineer the economy. After all, the revered mortgage interest deduction was enacted as a social policy, helping to subsidize a solid American icon, home ownership. And medical deductions to ease the burden of "catastrophic" (congress' words, not mine) illnesses.

Still, there are people who give freely to the church of their choice, yet decline to take a perfectly legitimate charitable contributions deduction. Go figure.

ChEAr$, Harlan Lunsford, EA n LA

Yes, that is exactly what he is saying.

I suggest you reconsider the ethics of the situation. Mother and father each give their son $12,000 and son uses the #24,000 total to pay the medical expenses of his wife. What is then unethical about taking the medical deduction on Schedule A?

Why would the source of the gift determine the ethics of the deduction?

Dick

What are you talking about?

Gil Faver wrote: ...

immoral? :)

() would be non-

Deductions should certainly be allowed here as you're sponsoring a random child. Now if you happen to know that person, then the deduction may be fraud. I found the text of the law at

Harlan Lunsford wrote: ...

...

If so or if not specifically but the gifts freed up other monies to pay non-related medical, still fail to see where there's any moral or ethical dilemma???

A gift, after all, is a gift -- once it's given, there can be no strings or it isn't actually a gift after all...

I was just being silly, which is how I was reading this particular sub-thread at the time I posted.

Is this the slow time of year for tax preparers, or what? ;-)

-Mark Bole

Hah! Not so. If I give a relative some money, he/she better use it for what it is intended. otherwise, they'll never see another dime of my money.

ChEAr$, Harlan Lunsford, EA n LA

With good crack like this, and meaningful tax discussions, it's never a slow time.

ChEAr$, Harlan Lunsford, EA n LA

.... stupid?

ChEAr$, Harlan Lunsford, EA n LA

The way it is currently administered, perhaps. But so many are clamoring for tax simplification. The AMT is very simple. Of course it eliminates some deductions that have been used to encourage certain behaviors that are considered desirable, and perhaps even some deductions that some would consider to be "fair."

But it's certainly simple.

Stu

That's often a condition placed on the recipient which makes it not truly a gift (in the pure sense only, of course, even though it would still meet the letter of tax law, etc., ...).

And, of course, there's always the subjectiveness to which one can only counter w/ imo, $0.02, ymmv, etc., etc., ... :)

I must agree with you because I said almost the same thing to my older son this morning. But for tax purposes ....

Dick

is it simple to be able to get an AMT credit in future years for some items, but not all? I don't really understand this part, or even what is or isn't excluded for AMT calculations. Not simple at all. Maybe if it replaced the regular income tax, it would become simple, since it would be the rule rather than the exception. But as an add on, it is not at all simple.

In article , Gil Faver

My understanding is that with organizations like that your contribution doesn't actually go to the individual child but to support the organization's operations as a whole. The "sponsor" program is really nothing more than a marketing scheme to get people to contribute more.

I was familiar with that language, but I didn't think of applying it in this kind of context. I thought the language in §170(c)(2)(C) applied to employees and managers of the nonprofit, not to its proper charitable beneficiaries.

Stu