@Jtrain4 wrote:
Yes sir. I just read your responses to this question about pastor appreciation gifts. I'm a pastor and struggle with determining what to do with non-monetary gifts given to me in the manner you described. My church encourages people to give cards, gift cards, and any kind of gift. The church leaders collect it all and then give it to me altogether. I also count cash and gift cards as income. I struggle with what to do with books, mugs and stuff like that, because I figure some people give me things because of things I've done for them, and I wonder if that disqualifies them from being considered De Minimis.
It's going to be dependent on facts and circumstances. Here are some further thoughts to what I wrote above.
Assuming your church pays you a fair salary, and the gifts are completely free will, and the church does not issue tax deductible receipts for the gifts, then it is a gift to you and not part of your church salary, even if someone collects all the money and gift cards to hand to you at one time. However, if the church pays less than a fair salary, and they "encourage" extra gifts to boost your salary, then the church should probably collect the money directly and add it to your W-2. If the church asks to collect free will gifts, it would be highly improper for them to issue tax deductible receipts, and the church would-have to make a decision to either treat the funds as contributions to the church that are used to pay a salary bonus, or the gifts are personal gifts between the church member and you in which case the church can play no role in determining the proper amount, issuing receipts, or keeping track of the gifts.
Assuming the money is a free will gift and not part of your salary, then you can decide whether to treat it as a gift or as self-employment income. This would depend on whether it is a free will gift with no strings attached, or if it is associated with some specific service or benefit that you provide to the member. Clearly the fee you collect for performing a wedding or funeral is self-employment income, even if it purports to be a gift. But if you don't do anything extra for the gift except provide normal ministry services for which you are already adequately and fairly compensated, then I think you would be safe treating it as a non-taxable gift. It depends on whether there is an exchange between you, or a free will gift with no strings.
