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Possible tax on the gifts my father received

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What is the name of your state? FL
My father spent his time as a missionary in the U.S. and South America. In January 2020, he had a terrible accident for which he has been receiving treatment. After knowing about this accident, he received $66,730 as gifts from several kind hearted and generous persons in the U.S. although we did not make a request for help. Those gifts are in the form of cashier checks (total $20,300) and money orders (total $40,250) from anonymous donors. Few people mailed personal checks (total $6,180) and they are not anonymous. By God grace, my father has been recovering but, physically, he will never be the same as before. We carefully collected copies of each of those checks and money orders and deposited them in his personal account and used part of it for his treatment. Is he obligated to pay tax on any of these gifts? Please provide details as we have no experience in these matters. Can he donate any leftover gift money to a Church? My father is a resident of North Florida.
 


LdiJ

Senior Member
What is the name of your state? FL
My father spent his time as a missionary in the U.S. and South America. In January 2020, he had a terrible accident for which he has been receiving treatment. After knowing about this accident, he received $66,730 as gifts from several kind hearted and generous persons in the U.S. although we did not make a request for help. Those gifts are in the form of cashier checks (total $20,300) and money orders (total $40,250) from anonymous donors. Few people mailed personal checks (total $6,180) and they are not anonymous. By God grace, my father has been recovering but, physically, he will never be the same as before. We carefully collected copies of each of those checks and money orders and deposited them in his personal account and used part of it for his treatment. Is he obligated to pay tax on any of these gifts? Please provide details as we have no experience in these matters. Can he donate any leftover gift money to a Church? My father is a resident of North Florida.
The person who receives a gift never pays tax on the gift. It is only the giver of gifts that may have to pay tax on the gift. Of course he can donate any leftover gift money to a church.

How did the donors know about your father's accident? You will want that documentation as well in case the IRS ever inquires about the money.
 

Taxing Matters

Overtaxed Member
What is the name of your state? FL
Is he obligated to pay tax on any of these gifts?
Gifts are not income for federal income tax and the person receiving a gift does not pay any federal gift tax on gifts he receives. Any gift tax wouldbe imposed on the donor (person giving the gift). Florida has no income tax or gift tax. So your father has no tax to pay on any of these gifts. Be sure to keep those copies of the checks and any other evidence he has to show that these were gifts should the IRS happen to think the money might be income.

Can he donate any leftover gift money to a Church?
He may do that, of course. And that donation would be eligible for a charitable contribution deduction if he itemizes deductions on his federal income tax return.
 
Thank you friends and your valuable replies are highly appreciated.

The news about my father’s accident was spread by word of mouth, and particularly by ministers from the churches across the region. There is no document to show how the donors knew about that accident.

A friend, who knows about this accident, warned me in a friendly way that IRS may come after my father alleging that he did some business prior to his accident and made $40,250 cash income and, once he had accident, we simply converted that cash into money orders to avoid paying taxes on that income. He said that the cashier checks can somehow be traced back by IRS to the real senders even if those cashier checks are anonymous but the money orders cannot be, therefore the IRS may question on the senders of money orders. He further warned me that IRS suspects everything as income and we need to quell that suspicion or else we will be in more trouble than what we are facing with that unfortunate accident. He said, if my father cannot establish who gave him the gifts, and IRS cannot confirm the source, IRS will just access it as income. He said “we all know and God knows about your father but IRS is not”. I am concerned. This is one of the reasons why I posted this question in this great forum.

Have a blessed day.
 
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Thank you. Until now, my father lived spotless life in the service of God, therefore we are very concerned on what if my friend told me becomes a reality. Please share your suggestion.
 

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