Gift for agreement of employment

[bwlawson-jr]

I'm a musician and live in Virginia.  In 2023, I played music at a local church and was compensated as a non-employee.  The church asked me to become an employee to lead their music, and as an incentive, offered to give me a guitar if I agreed to employment.  I became an employee and received the guitar.  Is this taxable and if so, how should this be reported in TurboTax?

[Mike9241 · Accepted solution]

if that guitar is worth more than a nominal amount (se below) say like $25(?) the church should have included it on your W-2 as compensation. If it's worth a lot more the church should issue a corrected w-2. 

An exception to the general rule of taxing incentives and rewards is de minimis benefits. These benefits are so low in value and frequency that having to account for them would be unreasonable or impractical. For example, office snacks, use of the company copy machine, holiday gifts, or occasional meal money for working overtime.

[bwlawson-jr]

Thanks for your reply.  The guitar is worth $800