if someone gives you money, do you have to declare it as income? no gift tax -

[Grumpy's Gal]

if someone gives you 10K, you don't have to declare gift tax but I'm wondering if you have to declare it as income?

we will be applying for financial aid in a year and I don't want to make this count against me.

I have found online that I wouldn't have to pay gift tax but I can't find out if I have to declare it as income for taxes etc.

HELP! (and thank you!)

 

[GoofyMB]

A gift is not reported as income on your tax return.

 

[disykat]

It won't be income, but it will be an asset if it's sitting in your savings account or investments.

 

[tnmt]

changed my mind. will keep my opinion to myself

 

[Marionnette]

if someone gives you 10K, you don't have to declare gift tax but I'm wondering if you have to declare it as income?

we will be applying for financial aid in a year and I don't want to make this count against me.

I have found online that I wouldn't have to pay gift tax but I can't find out if I have to declare it as income for taxes etc.

HELP! (and thank you!)

Will this be financial aid for college? And is this for a dependent child or for yourself (or spouse)?

When it comes to state and federal college aid, the amount of money that the student has in assets will count more toward what their expected contribution will be than what the parents have in financial assets. But some colleges will ask to see more information when it comes to meting out their own grants and needs-based scholarships.

So even if that $10K doesn't show up on your income tax return, it will have to be included as an asset on the student's FAFSA report if it is in either the kid's account or the parents'. It will simply "count against" you less if it is in the parents' names instead of the student's.

Unless, of course, if you spend it before you file your FAFSA.

 

[Cheshire Figment]

Money received as a gift is not income for any income tax purposes. It it is more than $13,000 in one year from one person, that person may be liable for Gift Tax on the money, but the recipient is never responsible for Gift Tax.

Mike (CPA Retired)

 

[LadyBeBop]

The correct answer is...it depends.

If it is truly a gift, then no it is not income. And it probably should be from someone who you have a close relationship to.

If you received it as a prize (e.g. winning a radio contest), then yes, it is taxable income.

If you received it as payment for services rendered or goods delivered, then yes it is taxable income.

Sounds like this is truly a gift, in which case there are no taxes due. Rule of thumb; if you receive a Form 1099 for the income in January, then the income is taxable. If not, then it is non-taxable.

So even if that $10K doesn't show up on your income tax return, it will have to be included as an asset on the student's FAFSA report if it is in either the kid's account or the parents'. It will simply "count against" you less if it is in the parents' names instead of the student's.

Unless, of course, if you spend it before you file your FAFSA.

Time for another Disney trip?

 

[Marionnette]

Time for another Disney trip?

I was thinking more along the lines of laptop computer and used car for the college student but a Disney trip sounds good, too.

 

[lucigo]

if someone gives you 10K, you don't have to declare gift tax but I'm wondering if you have to declare it as income?

we will be applying for financial aid in a year and I don't want to make this count against me.

I have found online that I wouldn't have to pay gift tax but I can't find out if I have to declare it as income for taxes etc.

HELP! (and thank you!)

I'm so confused...tell me about the puppy picture, whats the story?

 

[lucigo]

I'm so confused...tell me about the puppy picture, whats the story?

Nevermind, its not you, its my computer. Very strange, better check for viruses. Sorry!

 

[OrangeCountyCommuter]

As a CPA....

Tax advice, Financial Aide advice and other accounting advice received on a board like this is worth EXACTLY what you paid for it...... Keep that in mind

(Do you really want to be telling the IRS/School authorities etc... "the folks on the DIS told me it was ok" LOL!)

 

[seashoreCM]

Rule of thumb; if you receive a Form 1099 for the income in January, then the income is taxable. If not, then it is non-taxable

I beg to differ.

If you receive a Form 1099 then the money is probably taxable income. (You may be able to offset some of it with various expenses before computing the tax attributed to that amount.)

If you don't receive a Form 1099, then no conclusions can be drawn from that fact alone.

In either case you would still have to ask yourself why and how you received the money.