Does Monetary gift count toward my yearly income?

Forum|Forum|2 years ago
April 24, 2024
2 replies
5 views

I received $25K bonus gift that the giver already paid tax on. Will I have to report this as part of my income for next years taxes?

Ask the Experts - Refund II - April 2024

Anonymous_

Level 15

You need to elaborate.

What were the circumstances surrounding the gift?

What do you mean by the term "bonus gift"? Was this in connection with employment or services rendered?

EJNich1Author

Level 2

Our company was sold to new owners and our previous owner distributed the profit of that sale to its employees. So it was considered a bonus gift

Anonymous_

Level 15

@EJNich1 wrote:

Our company was sold to new owners and our previous owner distributed the profit of that sale to its employees. So it was considered a bonus gift

Yes, that sounds like it would be fully taxable as compensation of sorts rather than an actual gift.

The funny thing is there is a case almost exactly on point with your scenario and with exactly the same dollar amount.

See https://irstaxtrouble.com/is-a-gift-to-a-former-employee-taxable/

PatriciaV

Level 15

In general, gifts are not taxable to the recipient as long as there is nothing given in return. The donor is generally responsible for paying the gift tax.

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