taxpayer has, somewhat reluctantly, agreed to help her mother and aunt substantially remodel a small rental bungalow so that it might once again be rented. Aunt and mother stand back and do nothing, and taxpayer has all the interaction with the contractor, etc. Property is owned by mother and aunt, and not at all by taxpayer. Taxpayer will receive a small amount for her efforts, say $5,000.00. Is this self employment income to taxpayer? She is not in the business of renting property (this or others) owned by her, nor is she in the business of remodeling.
self employment income?
Mar 08, 2008
12 Replies
"Gil Faver"
Because you don't get gifts for doing work, you get pay.
Seth
OP said "...agreed to help her mother and aunt ..." Isn't that family? Don't families do each other favors? Families sometimes say thanks presheateit Geo.
Sure thing, that's family. However, it's also income to be reported.
No doubt. I used to do my mother's tax return for free. And I still do my wife's tax return for free, but without any "quid pro quo", ifyougetmydrift.
What does "presheateit" mean?
Ah yes! I went back and said it fast aloud. got it now.
ChEAr$, Harlan Lunsford, EA n LA
GSalisbury wrote: ...
Except OP also said "_will_ receive" and the fact it doesn't seem to be clearly a gift to the OP makes it look far more like a bribe than a gift... :)
not a gift. So, any thoughts on the self employment income questions?
I guess ", somewhat reluctantly, " does make that case.
On Mar 8, 12:15 pm, "Gil Faver"
Gil Faver wrote: ...
I'm not a tax pro, but the one-time aspect of this to me would qualify it as "other income" and I'd report it on Line 21.
Money given in exchange for services, even if not legally required to be paid, is considered by the IRS to be taxable income. It's not exactly the same, but look at a tip given to a waiter in a restaurant. You have no legal obligation to leave one, and the size of the tip is also up to you. However you give it because you received services, so it is not a gift. It is taxable income.
Stu
aw, Stu. You are answering the easy question here. Any opinion on whether it is self employment income? thanks.
"Gil Faver"
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