Paying Taxes on Donations and Gift Money

[soulwinner10]

Hello

Last year (2022), my daughter was in a singing contest. Any prize money that she received was distributed between the company, herself, and a gift donation to someone of her choosing. Well, I received a personal donation in the amount of $615.00 (2022) from the company. They had me fill out a W-9 for tax purposes last year in order to receive the check. Well, it's now February 8, 2023 and I have not received a 1099 from them. I reached out to the company and asked them for the status of my 1099-MISC and I was told by the president of the company that they did not mail me one (I'm not getting one). Don't they have to provide me with one? How do I go about reporting this on my taxes when I file?

What taxes do I have to pay for a gift and/or donation in the amount of $615.00?

Thank You.

[Bsch4477]

If what you received was a gift you would not have to report it. 

[Vanessa A]

If this was a gift, then you would not report anything on your taxes as gifts are not taxable income.

If this was prize money, then you would report it as other income.  It sounds like it is prize money for your daughter and a gift to you.  This means if your daughter is filing a tax return, she would report the amount she received as a prize as other income. If she is filing a return then she would report it by selecting the following:

• Income
• Show More next to Less Common Income
• Start next to Misc Income
• Start next to Other Reportable Income

[soulwinner10]

Hello Vanessa,

The $615.00 was a percentage off of the prize money that my daughter won, but a donation to me in the form of a check given by the company that was running the contest. The check was not from my daughter, but from the company running the contest. Why did they have me fill out a W-9 then in order to receive the donation money if I don't have to pay tax on it? I thought I have to pay taxes on gift or donations over a certain amount, like $600.00.

My daughter is not filing income taxes for 2022 (she was a dependent, full-time college student, and not employed).

Thanks Again.

[soulwinner10]

It was a percentage of prize/award money that my daughter received for the competition. The check was from the organization to me in the amount of $615.00. It is a donation from award money. It doesn't really fall under a gift because the check was made out to me from the organization. What are the guidelines to determine whether is was a gift or not? The organization is not providing me with a 1099-MISC, it seems they know something I don't. So, who pays taxes on that money then?

My daughter is not filing taxes for 2022. She was a dependent, full-time college student and was not employed.

- Thank You

[Mike9241]

never heard of such an arrangement before.  if you performed no services for them then you do not have taxable income.  so why did the company give you the money? 

[MarilynG1]

As stated above, if the company considers this a 'gift' to you, you don't need to report it.  They probably had you do the W-7 as a procedure.  You could document your conversation with the president of the company just in case. 

If your daughter is not required to file a return (did she receive a 1099-Misc?), she wouldn't report it either.  If her unearned income exceeds $1100, she would need to file. 

[soulwinner10]

The company had me fill out a W-9 in order to receive the $615.00 donation. I received the money because my daughter was in a singing competition and her award money was disbursed between the company (they took a percentage), herself, and a person/charity of her choosing. I was the person/charity that my daughter chose. I did nothing to earn it, so, why did they have me fill out the W-9? They didn't receive any services from me and I'm not self-employed or an independent contractor. So, is it taxable or non-taxable?

[soulwinner10]

Hello Marilyn,

They had me fill out a W-9, not a W-7. My daughter did not receive a 1099-MISC and as I stated previously, she was a dependent, full-time college student, and no employment. Her unearned income did not exceed $1,100.00. I will reach out to the president and ask her if it was a "gift" to me. Thanks.

[Vanessa A · Accepted solution]

No, this is not taxable income for you.  This was a gift.  You personally did not win anything.  You did not perform a service, you simply received money and gave nothing in exchange.  

The W9 they had you fill out is likely for their records and standard procedures.  Many times companies have blanket policies that people not in accounting follow so no one is missed for the accounting department. It could also be for other compliance purposes. You filling out a W9 does not make the income taxable.  Gifts are not taxable to the recipient.