I have a job, but my relative wants to give me some extra cash to put in my account. Do I have to pay taxes for that money?
2007-03-21 03:27:58 · 7 answers · asked by dolphin 2 in Business & Finance ➔ Taxes ➔ United States
Hello, Dolphin! If it is truly a gift and you have not done any work for this relative, then no, you are not responsible for any taxes.
Per IRS Publication 17, you will not be taxed on the gift, but you would be responsible for any additional income that the gift generates (like if you put the cash in a savings account which earned interest).
2007-03-21 04:50:35 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Generally speaking, no.
That kind of money is either considered financial support or a gift. Support is
never deductible by the person giving it, nor is it includible as income to you.
Financial gifts have separate tax consequences. First off, gifts are taxable to the one giving the gift, not the one receiving the gift. Under current tax law,
one can give a financial gift to another person as long as it does not exceed
$ 11,000 per year. Up to $ 11,000 the giver of the gift does not pay tax. Over $ 11,000, the giver of the gift loses a portion of her estate exemption and may have to pay tax if all of the gifts exceed his/her estates exemption.
If you are receiving substantial support and/or gifts during the year, lets say
in excess of $ 10,000 per year, and you are depositing them into a bank account, you should keep a record of them. The IRS, although, quite uncommon, can do a "disposable income" audit on you, and you may have to explain the source of the support and/or the gifts.
If the payer of the support and or/gifts report their payment as a deduction on their tax returns, they are required to provide your identifying number as the recipient. In that case, you may have to include it as income.
Consult a tax practioner or CPA if that event arises.
2007-03-21 06:32:04 · answer #2 · answered by bold4bs 4 · 0⤊ 0⤋
No, gifts that you receive are not taxed to you.
Depending upon the amount of the gift, the person giving it may have to pay a Gift Tax.
2007-03-21 05:40:05 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Nope
they may have to pay gift tax if they give you more than $11k but you are in the clear.
you cannot do work for this money. it must be gift
irs.gov for definition of gift
2007-03-24 17:00:22 · answer #4 · answered by Fredric MD boy 1 · 0⤊ 0⤋
A gift isn't taxable to the recipient. If it's over $12,000, the giver might have to file a gift tax return, and might have to pay a gift tax on it.
2007-03-21 07:20:56 · answer #5 · answered by Judy 7 · 0⤊ 0⤋
If it a gift you don't have to pay taxes on it.
If it's more than $11,000 then they need to do a gift tax on the money, not you.
2007-03-21 05:40:25 · answer #6 · answered by gsi 5 · 0⤊ 1⤋
If it's a one time gift it shouldn't matter. If it's a fairly large amount and you're ever audited, you may have some explaining to do.
Would you believe that to purchase a house that a client is not permitted to bring thousands of dollars to closing in cash? Why? The feds want to see a money trail.
So make sure someone is not trying to use you to 'hide' money.
2007-03-21 03:32:15 · answer #7 · answered by Venita Peyton 6 · 0⤊ 5⤋