Should I declare the $5,000 cash gift I received even though I do not have to?

Question

I made about $13,000 last year from contracting, but only netted about $7,000 after expenses. So I am afraid the IRS will wonder how I ate unless I show that I received this gift. I have nothing to hide, but I also feel little desire to be audited.

(For those who will ask how I ate even on $12,000, the answer is: roommates. I ate my roommates. No but seriously now, folks, I have three roomies and my rent is very low. Plus one of them is lactating, so plenty of milk. NO just kidding again. Just be glad you're not one of my roommates and don't have to listen to me. Please just take pity on me and share your knowledge.)

Answer 1

No, you don't report a gift - there's not even a place on the form to put it if you wanted to!

And lots of people survive on less than $12,000 a year.

Answer 2

As you stated, the $5000 was a gift, not "income" as defined by the Internal Revenue Code. Gifts are never reported by the recipient, though they are sometimes reportable/reported by the giftor.

Also, as a practical matter, you do not need to worry about the IRS at your income level. The IRS does not waste its time and resources chasing after relatively low-income taxpayers. As long as you dot your i's and cross your t's, you'll stay off the IRS radar. It would not be cost effective for the IRS to go after you, even if you did cheat a bit on your return. (Please not that I do not advocate cheating.)

Answer 3

The gift is not taxable and should not be listed on your return. Keep evidence of it if the IRS asks any questions, though.

Answer 4

Gifts are not taxable. Do not include it on your return.