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Thread: Cash gifts & Taxes

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    Newbie cortigiana's Avatar
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    Default Cash gifts & Taxes

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    Last edited by cortigiana; 07-24-2012 at 03:13 PM.

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    Banned Melonie's Avatar
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    Default Re: Cash gifts & Taxes

    I can only tell you that the US IRS has precedent that 'gifts' from sugar daddies are NOT legally considered to be gifts. Instead they are considered to be 'payment for services rendered' ... and as such are considered to be taxable income.

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    Default Re: Cash gifts & Taxes

    Quote Originally Posted by cortigiana View Post
    I live in the UK, but I often travel to the US and apparently you have to pay tax on gifts in the US...?
    No. In the US, as in the UK, there is no tax due from the recipient of a gift. The US does have a consolidated estate and gift tax which imposes a tax on donors when their gifts or estates exceed $5,000,000 for 2011. Gifts in excess of $13,000 per year per recipient are taxed from 2011 onward. Although the tax would be applied to the overall $5,000,000 lifetime exclusion. Of course, things may change with the 2011 and 2012 budgets still being negotiated.

    However, the US Internal Revenue takes the position that sugar daddy gifts are not in fact gifts at all, but payment for services rendered and thus wages to be taxed as such. Thus, they would arguably be deductible for the giver and income for the recipient. In practice, the IRS also takes the position that the giver cannot deduct sugar daddy "wages" because they are not ordinary and necessary business expenses.

    Having said all that, if you are just a casual visitor to the US and not receiving any gifts while you are here, you have nothing to worry about. But, if you accompany a sugar daddy on a visit to the US, and he makes a gift to you for the time you spend with him in the US, the IRS would take the position that is not a gift and income tax is owed on your US source income with a corresponding deduction for taxes you paid on it in the UK, if any.

    Now, if you receive a gift from a US citizen in the United States, and it is a sugar daddy situation, then the IRS position is you are subject to the income tax and your sugar daddy does not get a corresponding deduction for the gift. Where you deposit your gift is meaningless to our law. Also, receiving gifts from US citizens for time you spend in the US might also put you in violation of your visa. Which can lead to a whole host of other problems.

    HTH
    Z

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    Veteran Member Cam_chick's Avatar
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    Default Re: Cash gifts & Taxes

    If I receive an amazon giftcard, do I have to count that as income on my taxes?


    "You don't want to work today?? I get paid 9 dollars an hour to move boxes around, so go fuck yourself. No really, go fuck yourself right now"

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    Banned Melonie's Avatar
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    Default Re: Cash gifts & Taxes

    ^^^ just a personal opinion, but if you're talking about hundreds of dollars on a one time amazon card, I'd think that qualifies as a gift. If you start talking about tens of thousands of dollars worth of 'gifts', from sugar daddy's credit card based shopping sprees, to having your rent paid, to having full use of sugar daddy's car etc., then you're in the realm of receiving 'payments for services rendered'.

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    Veteran Member Cam_chick's Avatar
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    Default Re: Cash gifts & Taxes

    I guess the question more relates to the idea that I may start selling underwear and asking for payment in amazon giftcards. would that income need to be reported?


    "You don't want to work today?? I get paid 9 dollars an hour to move boxes around, so go fuck yourself. No really, go fuck yourself right now"

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    Banned Melonie's Avatar
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    Default Re: Cash gifts & Taxes

    ^^^ yes, as shipments of 'biohazard' materials !!!

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    God/dess Zofia's Avatar
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    Default Re: Cash gifts & Taxes

    Quote Originally Posted by Cam_chick View Post
    I guess the question more relates to the idea that I may start selling underwear and asking for payment in amazon giftcards. would that income need to be reported?
    Definitely income which you would report on Schedule C, if you are not incorporated or organized as a LLC. You get a corresponding deduction for the cost of the panties (cost of goods sold) and postage, website fees, and the like (ordinary and necessary).

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    Default Re: Cash gifts & Taxes

    What is the difference (in the eyes of the IRS) between a sugardaddy paying your rent, and a boyfriend paying your rent? (The situation was that I had better credit, so the apt was in my name, but he lived with me and gave me cash to pay for everything). Is that income or a gift?

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    God/dess shanna dior's Avatar
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    Default Re: Cash gifts & Taxes

    Quote Originally Posted by Queen Jewel View Post
    What is the difference (in the eyes of the IRS) between a sugardaddy paying your rent, and a boyfriend paying your rent? (The situation was that I had better credit, so the apt was in my name, but he lived with me and gave me cash to pay for everything). Is that income or a gift?
    Those are two completely different situations. For all intents and purposes, that boyfriend is a roommate. It's not rare for a lease to be in one person's name with that person writing a cheque to the landlord and the roommates giving them cheques/cash for their portion of the rent. That's neither income nor a gift, that's just you paying the landlord yours and your boyfriends' rent with one cheque. You didn't make money off of it since it went to the landlord anyway.

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