Are these considered income?

[UCDAggies]

Two questions.

1) As a gift your employer gives you a $5,000 watch. Since it is a gift, you don't have to report it as income right.

2) You paint a friends house and he pays you $300 for your trouble.


legally are these income. I don't think so, since 1 is a gift, and 2 is an exchange between friends.

 

[DaveSimmons]

Look up at the stickies 🙂

 

[Flammable]

the 2nd one im thinking it is income seeing as you did work for it?

 

[BoomerD]

http://www.irs.gov/businesses/small/article/0,,id=98968,00.html

 

[drinkmorejava]

The second is taxable income, the first, you'd have to look up the amount on gift exemptions.

 

[Canun]

IIRC, both would be considered taxable for IRS purposes. Our company hands out bonuses, but taxes them at the gift tax rate. When it is time to file the return, the income is reported as regular income and you get a refund.

Then again, alot of people don't report those items. Especially the $300 for helping paint. These are just guesses based on what I help tax preparers with every day at work.

 

[UCDAggies]

But can your employer give you a gift, would that fly with the IRS.

 

[rbV5]

Originally posted by: UCDAggies
But can your employer give you a gift, would that fly with the IRS.

*Turkey or ham or other gift of nominal value = no tax
*Anything of value = regular income subject to tax.

 

[JS80]

Originally posted by: drinkmorejava
The second is taxable income, the first, you'd have to look up the amount on gift exemptions.

his EMPLOYER gave him the watch. the employer is supposed to add that to his reported income to non-cash compensation.

 

[KMurphy]

If it is "tax assisted", your employer took care of the taxes on it.

 

[FoBoT]

both are income, for #1 the employer has to include it as compensation in your W-2, but even if they didn't you still have to report it
your employer can't give you a $5000 watch tax free, it doesn't work that way

my employer used to give out $50 gift certificates as "atta boys" and they add it to our pay record

 

[ElFenix]

the IRS figured out a long time ago that they wouldn't collect any money if any 'gift' from an employer to an employee wouldn't be considered 'income.'

they are both income.

income is any realized increase in wealth.