I have a freind, whose daughter encountered a major (not totally insured) medical issue. They started a Go Fund Me page, fo neededr financial assistance.
I asked them if those "gifts", ended up worth over $25k had any IRS (or CT state) Income tax impact? A totally blank stare followed.
My question : What are the tax consequences, of such donations ?
Gift taxes are paid by the giver, not the receiver. A single donor would have to give over the limit for there to be any tax consequences.
Gift taxes are paid by the giver, not the receiver. A single donor would have to give over the limit for there to be any tax consequences. ======= Furthermore, these "donations" do not qualify as a charitable contribution. They are for the benefit of a specific individual.
Expanding on Barry's answer - the funds raised by the GoFundMe page are considered gifts to the recipient as long as there was nothing of value given/promised in return for the gift (not likely in this case, but certainly possible in other GoFundMe situations). Gifts are subject to Gift Tax filing if a gift of more than $14K is given by one individual to another individual.
Ira Smilovitz, EA
Are gift tax returns required if the payments (in excess of $14k) are made directly to the medical entities?
I just noticed that paying for educational and medical expenses are excluded from gift taxes.
Isn't that only if paid directly to the biller, not to the student/patient?
Thanks, to many responders. You have clarifed, what I had merely (I am surely not tax/ IRS qualified) thought. Thx
Yes. The payments would have to be made directly to the provider.
Ira Smilovitz, EA
So if a bunch of people pool their money, and have one of them write the check, it wouldn't count for the exemption? That's essentially what's going on with the GoFundMe site, right?
Anyway, this is all probably moot. The only person this would matter to is someone who contributes more than $14K to the fund. That seems pretty unlikely.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.