102(c) would seem to apply in this situation, not 102(a).
A gift must be in the nature of “something for nothing.” It is not a gift if the payment is a reward for services rendered.
No, I'm suggesting that, for uncertain items with large stakes, professional advice should be sought. That advice should be knowledgable and based on the taxpayer's specific facts and circumstances. I don't find exclusion to be a particularly aggressive position, and I know that many tax professionals would agree. But no one can provide an adequate answer based on the text of the poster's question.
Overall, you do a disservice to posters by taking unequivocal positions based on casual perusal of IRS publications and Google searches. The idea that this item is unequivocally income is simply misguided. That's why the initial response was wrong, and that's why the follow-ups are wrong. The poster's intuition--that this question is difficult and contingent--is correct.
@TomDB, if the poster has retired, how can the poster be an employee? The statute doesn't say anything about former employees. Again, the lack of information reporting on a W-2 by the former employer is informative--the gift appears to be after the employment relationship ended.
This article from the University of Michigan Law School Scholarship Repository supports the position that the "gift" is not a gift but payment for previous services and that § 102(c) applies, It also makes the argument that § 102 also applies to former employees:
The original question indicates that the "gift" was made by "the company" and made no mention of a personal relationship between the employer and the former employee. Without a personal relationship and a reason for making a gift other than "retirement" this cannot qualify as a gift that is excludible from income. § 102(c) applies.
Both Kahns are notoriously skeptical about gifts in general. So it's notable that Kahn does say that there can be gifts from an (entity) employer to a former employee. Kahn's criteria aren't the law, they're what Kahn thinks the law should be, or how the law should best be read. The footnotes are rife with caveats and exceptions (including a citation to the Bittker treatise that expressly notes that the application of 102(c) to former employees is unresolved).
Also, we don't know about the personal relationship between the poster and the former employer, so you really can't conclude that the car isn't a gift. As Kahn notes, there may be circumstances that negate the inference that the transfer is compensation for services. You'd need more facts from the poster.
So, no. Some in-kind retirement gifts are excludible. Lots of retirement bonuses are not. Those made while the employee still is employed clearly are not. In addition, many employers will take the position that retirement bonuses are compensation for services. But the poster implies that the former employer has taken the position that the car is not compensation, either on a W-2 or a 1099. So a fuller inquiry is needed. You can't reach a conclusion based on the available information, and there's enough in the post to warrant something more than conclusory statements about the outcome.
Honestly, I am done with this discussion.
However, what is interesting is that another issue arises if @helpfuluser's position is adopted; gift tax returns.
Assuming, arguendo, that this constitutes a gift and, further that the employer is an entity, then a gift tax return should have been filed because the "gift" exceeds the annual limit.
Although only individuals are required to file gift tax returns, partners or shareholders of the entity are considered donors and may be liable for filing gift tax returns and paying any gift/GST taxes.
[wonder if the accountant, tax professional, or whomever that chose not to report this transaction made mention of that]
....Will they be issuing a 1099 tax form of some kind ? Until you know how they are going handle it all of this talk is moot.
I would generally agree except the original post was transferred here from AXC and could be about a million years old.
The OP did indicate the employer was not going to report it but, regardless, this entire discussion is moot in the sense that the OP is in all likelihood long gone.
FWIW, threads transferred here from AXC, of which we do not know the actual posting date, should all be closed for further discussion.
Agreed that this discussion is done. It probably ended up in the right spot, which is a recognition of the underlying issues and some acknowledgment that there's not a clear, directive solution--such as the one presented in the initial reply. And the quality of authority increased over the posts.
In general, I don't think you have to be an expert to post responses in these forums--the posters clearly don't expect formal advice--but I do think that one should avoid stating unequivocal, fact-free conclusions without adequate thought and reflection. The employee achievement award rules, for example, are pure misdirection. But they doggedly dominate the first page of this thread, ready to mislead some poor person Googling a similar issue.
@tagteam Is correct that this is an old thread, and it was not posted this year. Clearly, there is a wealth of knowledge among this group (@helpfuluser @TomD8 @dmertz @Critter), as well as a passion for tax/tax law. Thank all of you for such a spirited debate on the subject!