Tax
Apr. 22, 2022
You don’t pay income tax on ‘gifts,’ but be careful!
True gifts are not income the IRS can tax, but the line between what is income and what is a gift is sometimes disputed.
Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
What is really a gift anyhow? Your definition and the IRS’s definition might be different. Of course, the facts and the background are going to matter. Suppose that you do a major favor for your employer, and he gives you a gift of $20,000. Is that really a gift? You might try to document it that way if you are aggressive, but it’s not likely the IRS would agree. Plainly, the IRS would say it is a bonus, even if it is not run through usual payroll.
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