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Posted by TheMightyAtlas on August 20, 2008, 2:19 pm
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An employee at my company experienced a serious illness and ran into
some financial difficulty. His co-workers (several hundred of them)
collected almost $15,000 and presented it to him. As far as I know, no
legal entity was set up to receive the money, just a separate bank
account in the name of one of the organizers (this thing became much
bigger than anyone had anticipated). Is the money taxable income to
the recipient or is it just a non-taxable gift? I assume that none of
the "donors" gets a deduction because this is not a qualified
organization.
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Posted by Paul Thomas, CPA on August 20, 2008, 2:41 pm
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> An employee at my company experienced a serious illness and ran into
> some financial difficulty. His co-workers (several hundred of them)
> collected almost $15,000 and presented it to him. As far as I know, no
> legal entity was set up to receive the money, just a separate bank
> account in the name of one of the organizers (this thing became much
> bigger than anyone had anticipated). Is the money taxable income to
> the recipient or is it just a non-taxable gift?
Non-taxable gift. At least the part from the co-workers.
> I assume that none of the "donors" gets a deduction
> because this is not a qualified organization.
Non-deductible gift.
--
Paul A. Thomas, CPA
Watkinsville, Georgia
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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by kastnna on August 20, 2008, 3:36 pm
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wrote:
> > An employee at my company experienced a serious illness and ran into
> > some financial difficulty. His co-workers (several hundred of them)
> > collected almost $15,000 and presented it to him. As far as I know, no
> > legal entity was set up to receive the money, just a separate bank
> > account in the name of one of the organizers (this thing became much
> > bigger than anyone had anticipated). Is the money taxable income to
> > the recipient or is it just a non-taxable gift?
>
> Non-taxable gift. At least the part from the co-workers.
Paul, please enlighten me. What do you mean by your last sentence?
Thanks in advance.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by TheMightyAtlas on August 20, 2008, 5:05 pm
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> wrote:
>
> > > An employee at my company experienced a serious illness and ran into
> > > some financial difficulty. His co-workers (several hundred of them)
> > > collected almost $15,000 and presented it to him. As far as I know, no
> > > legal entity was set up to receive the money, just a separate bank
> > > account in the name of one of the organizers (this thing became much
> > > bigger than anyone had anticipated). Is the money taxable income to
> > > the recipient or is it just a non-taxable gift?
>
> > Non-taxable gift. At least the part from the co-workers.
>
> Paul, please enlighten me. What do you mean by your last sentence?
>
> Thanks in advance.
>
Sometimes there is some kind of matching by the employer. You can
almost never receive a non-taxable "gift" from your employer. In this
case there was no matching, though happily it has triggered the
company to set up a fund for such circumstances, funded by the
company, but administered by a committee of employees. I am pretty
sure the payments from this fund will in fact be taxable income.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by kastnna on August 20, 2008, 8:39 pm
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>
> Sometimes there is some kind of matching by the employer. You can
> almost never receive a non-taxable "gift" from your employer. In this
> case there was no matching, though happily it has triggered the
> company to set up a fund for such circumstances, funded by the
> company, but administered by a committee of employees. I am pretty
> sure the payments from this fund will in fact be taxable income.
Interesting. Thanks for the education.
[que "The more you know" music]
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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