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Gifts Mistaken as Income?

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grawny

Junior Member
What is the name of your state (only U.S. law)? PA

So for the past year I've been learning how to program so that I can finally become a programmer, naturally I'm not earning any money from this and am not currently working a job. A dear generous friend of mine however has been gifting me money via check each month to help me get by. Is there any chance the IRS might mistake this money as income and charge me?
 


justalayman

Senior Member
Is there a chance? Sure. Whether it is ultimately decided will depend a lot on the relationship with your friend. Given the fact you are even asking suggests there may be something about the relationship that could be construed such that this might be seen as wages rather than a gift.
 

grawny

Junior Member
I've read somewhere that if the money is being received in a regular manner (like always on a specific day of the month) it could be misinterpreted as income, and obviously one does not want to piss off the IRS
 
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justalayman

Senior Member
so you are suggesting that when my father gave me an allowance, simply because he gave it to me every friday it would somehow be misconstrued as a paycheck?



Obviously a regular payment schedule will raise a flag as most gifts are not disbursed on schedules and paychecks are. It does not make it wages though nor does it preclude it from being wages. The facts behind the payment are what makes it wages or not.
 

LdiJ

Senior Member
so you are suggesting that when my father gave me an allowance, simply because he gave it to me every friday it would somehow be misconstrued as a paycheck?



Obviously a regular payment schedule will raise a flag as most gifts are not disbursed on schedules and paychecks are. It does not make it wages though nor does it preclude it from being wages. The facts behind the payment are what makes it wages or not.
Unless the payments were over 10k they would not raise any flag at all.
 

tranquility

Senior Member
How much are we talking about? Why is the dear friend supporting you? Are you providing anything* for that?

*By anything, I mean anything. Even...comfort. http://memegenerator.net/Mr-Bean
 

justalayman

Senior Member
Unless the payments were over 10k they would not raise any flag at all.
I had a very giving father.:D

OP wants to be ambiguous so I put that in there since it can raise a flag.



if the payment was only in cash and neither the payor or payee involved a bank, it can be $100k and it won;t raise any flags since nobody would know about it. Regular payments is simply one of the possible activities that can be used to determine whether it was a gift or income.

I should have been more clear:

the flag is not one that would invite scrutiny but if it comes to a determination of whether this was wages or a gift, regular payments are going to be something that will be considered and as such, raise a flag.
 

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