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Ernest Said:How do I know if my gift is taxable income?
We Answered:It really depends on who's giving it to you. If this is an inheritance, you can be taxed on that income and it won't change your AGI. If this is a gift, it may be subject to a gift tax. I'd consult a financial advisor regarding the tax treatment as well as ways you can shelter your money from the government.
Colleen Said:Is money received as a wedding gift taxable?
We Answered:it's a gift, don't make it harder on yourself than life already is. As far as the IRS knows, they don't know you got any gifts.
Sidney Said:Are gift cards received from a bank as rewards considered taxable income?
We Answered:My first thought is that No, it is not taxable income. For instance, when you receive cash back or rewards from credit cards you aren't taxed on that. To make sure though, I would suggest calling the bank and finding out what their policy is.
Judy Said:My employer gifted me an iPod Touch and then assessed a taxable gift value of $600. What do I do?
We Answered:No one doubts that the iPod was compensation. The question is how much--you say $299 at most, and your employer says $600. The first thing you need to do is double-check that at the time the iPod was given to you, it was retailing for $299 (or whatever). SAVE documentation of that fact. Once you're absolutely sure about the iPod's value, here is what you need to do:
First, consider the fact that the employer will get a deduction in the amount of the iPod's value. Therefore, the employer will wrongly claim a $600 deduction with respect to the iPod, thereby decreasing the employer's taxable income. If done intentionally, overstating a deduction is a form of tax fraud potentially giving rise to a penalty in the amount of 75% of the understatement of tax resulting from the fraud. What's more, the employer is expecting you to bear the burden of that overstatement because while his deductions increase as a result of the overstatement, your taxes increase.
So your goal here is to accurately report the value of the iPod as income ($300 or whatever), and get the employer to do the same.
The first step should be to bring this to the employer's attention, gently and politely. If the employer says "whoops" and reassesses the income, problem solved. If you get resistance, that's when it's time to involve the IRS. Call the Office of the Taxpayer Advocate (number online), and explain that you don't want to overreport your income and you are worried that your employer might be underreporting his. They will have step by step instructions for you, because they deal with this kind of thing all the time.
Don't tell your employer you're calling the IRS. Ultimately you may be told to report the lesser value on your return and submit a written explanation of why you're doing so. In the end (and this may be 2 years from now when the IRS gets around to it), the IRS would ask you both to clarify.
If it gets to that point, make sure you have retained documentation that at the time of the transfer, iPods were not valued at $600. Save something from the Apple website or a store showing that in fact, iPods were selling for far less.
Jason Said:Is a monetary gift received from parents taxable?
We Answered:Canada does not tax gifts.
Income that the gift earns would be taxable - provided that the money is not put into a tax sheltered (registered) account.
uk best essays said:
I think that tax should be totally obliterated from all the countries and the governments should think of new innovative ways to earn money and run the government in a more efficient way.
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