When is a "gift" considered taxable income to the recipient?

Not normally.

That would be a gift, because it's not given in exchange for anything.

No.

It's in exchange, so it's taxable.

She gives nothing in return, so it's not taxable.

[snip]

Unless Jane's trade is panhandling.

>

well, that would be fraud. Not sure if that affects the taxability of that money to her.

She stops pestering you for money. So, that is an exchange and thus taxable.

All employees who receive at least $20 in cash (or cash equivalent) tips in a month are required to report to the employer. IRS Publication 531.

Phil Marti VITA/TCE Volunteer Clarksburg, MD

If she actually has cancer, how could that be fraud? She asks for donations because she's sick, she gets donations. She can use the money for whatever she wants.

So every time your wife asks you for some cash, that's a taxable event? I doubt it.

-- Stu

But, could that activity rise to the level of a trade or business?

I don't see much difference between "panhandler" and "beggar", and I don't think either would be a trade or business. The fact that a gift was requested by the donee does not change its nature as a gift.

"beggar - one that begs; especially : a person who lives by asking for gifts " [Merriam Webster]

"Trade or Business" Defined (by IRS):

"The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services."

8841,00.html Don't see what goods or services a beggar or panhandler would provide. One's wife, on the other hand.....

Yes, if that is how you earn your livelihood. Panhandling is the way many individuals earn their livelihood. Panhandling rises to the level of being self-employment income when it is the way one earns his/her livelihood.

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Because she promised one thing and did another.

She asked for donations to cover her medical expenses, and she didn't use them to cover her medical expenses.

Despite getting them based on the claim she'd use them for her medical expenses?

Seth

Without a doubt.

I don't either. Either or both could be engaged in as a trade or business.

For our purposes, Merriam Webster does not define, "gift." Congress does.

If I won a prize on "Deal or No Deal", that's not given in exchange for anything. OK, I was on the show for the express purpose of winning money, so the contestant could be considered an employee and therefore not excludable under section 102.

But what about those people who were given cars by Oprah? They were in the audience without any expectation of gain. The IRS deemed the cars to be taxable?

Not an employee, but it's certainly not a gift. You perform services (act as a contestant) and get something in return, so it's taxable.

Oprah could have treated it a couple of different ways. She could have treated the cars as personal gifts, not deducted the costs from her own income tax, and they would not have been taxable to the recipients.

My understanding is that she didn't do that. She treated them as corporate gifts and deducted them. Corporations can give gifts and deduct them up to $25 per person the last time I checked. If the gift is more, it's taxable to the recipient. ___ Stu

Yes, the amount of income tax owed was as high as $7000 per car - see

oh no - not THIS thread again!

See the Dec. 2010 thread "are gifts received on TV shows free".