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pay for reception, a gift?

Hello folks,

My daughter will be getting married in November and my wife and I will be hosting and paying for the wedding reception (I'm stunned at how much these things cost). Is that considered a gift to her and/or her husband?

It seems like it wouldn't be because

1) my wife and I are the ones throwing the party (reception) and we are inviting the people, including my daughter and her husband, and

2) there is no direct benefit to her other than gifts received from attendees and such gifts are entirely optional.

Thanks for any comments.

Reply to
Vic Dura
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Congratulations.

No, the wedding reception is not a gift to your daughter, at least not as far as gift tax is concerned, which is what I assume you are really asking about. Here's how Pub. 950 defines a gift.

"The gift tax applies to transfers by gift of property. You make a gift if you give property (including money), the use of property, or the right to receive income from property without expecting to receive something of at least equal value in return."

By giving the reception, you are not transferring any property to your daughter, so there is no taxable gift.

Bob Sandler

Reply to
Bob Sandler

It's interesting that there's a tax difference between:

A writes a check to B, who performs a service for C.

and

A writes a check to C, who writes a check to B, who performs the service for C.

I suspect the OP was concerned that the IRS might view the first scenario as a tax dodge, equivalent to the second scenario. But the difference is that in the second scenario, C is not forced to give the cash to B. Once they receive the money, they can do with it as they please. Giving someone property is different from paying someone to give them a service (having a service performed for you doesn't increase your net worth).

Reply to
Barry Margolin

On Mon, 13 May 2013 22:16:30 EDT, Barry Margolin wrote in Re Re: pay for reception, a gift?:

Good point. Actually since she lives 1100 miles away from us she will be making all the arrangements on our behalf. We will then send her a check to pay for the arrangements. However it is still our party with the invitations issued from us.

Reply to
Vic Dura

On Mon, 13 May 2013 18:52:14 EDT, Bob Sandler wrote in Re Re: pay for reception, a gift?:

Thanks.

And thanks for the comments and reference.

Reply to
Vic Dura

If you are making a gift, you are making that gift to each and every individual who is attending the reception. Unless the value of that reception is more than $13,500 per person, the discussion of whether gifts have been made is only an academic exercise.

Contributing to that exercise, food is property. Party favors are property. The right to listen and dance to music is (intangible) property.

Reply to
Bill Brown

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