Will I have to pay taxes on money that is donated to me as a result of a hardship?

I was disabled from a car crash that happened 1 1/2 years ago. My co-workers held a benefit for me and I need to know if I have to pay taxes on the donated amount. The amount was approximately 10,000.

Asked by newbie2994135 53 months ago Similar questions: pay taxes money donated result hardship Business > Financial Planning.

Similar questions: pay taxes money donated result hardship.

Gift money You do not have to claim a gift less than $10,000 for the IRS. If your state has an income tax, you would have to check the law. Whether donated money from a benefit would fall under the heading as a gift, you would have to check with the IRS..

$11,000 can be gifted untaxed According to a CPA I consulted after the death of my brother, you can give up to $11,000 as a gift to a person in one calendar year before gift taxes are imposed. This came up because we decided to keep my brother's house for my parents and had to pay off the mortgage of $55k. He told me I could give each parent up to $11k.

He also told me to pay it all off I could make similar gifts to my siblings and then they could gift it to my parents. We the assistance of two of my remaining siblings we pasted the money around and got the house paid off using my brother's life insurance of which I was the beneficiary. I wasn't sure if this was just a state law or a federal law but I looked it up and found the below link that agrees with me.

The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

Gifts that are not more than the annual exclusion for the calendar year. Tuition or medical expenses you pay for someone (the educational and medical exclusions). Gifts to your spouse.

Gifts to a political organization for its use. Gifts to qualified charities (a deduction is available for these amounts). Annual Exclusion A separate annual exclusion applies to each person to whom you make a gift.

For 2002, 2003, 2004 and 2005, the annual exclusion is $11,000. Therefore, you generally can give up to $11,000 each to any number of people in 2002, 2003, 2004 and 2005, and $12,000 in 2006 and none of the gifts will be taxable. If you are married, both you and your spouse can separately give up to $11,000 to the same person in 2002, 2003, 2004 or 2005 ($12,000 in 2006) without making a taxable gift.

If one of you gives more than $11,000/$12,000 to a person in any one of these years, refer to gift splitting in Publication 950, Introduction to Estate and Gift Taxes. Gifts to individuals are not deductible on the donor's income tax returns. Sources: http://www.irs.gov/businesses/small/article/0,,id=164872,00.html .

Nope Gifts aren't considered income, so you owe no taxes on them. But they're not deductible, either, so your friends can't take them as a deduction. You'd have to set up an official 501(c)3 charity for that to happen.

If somebody had donated more than $12,000 they'd have a reporting obligation. You're not allowed to use the "gift" rule as a way of getting around paying income tax. But this is clearly a gift, so you owe no taxes on it.

Sorry to hear about your accident. I hope you feel better. Sources: The 1040 instructions, irs.gov/pub/irs-pdf/i1040.pdf .

Probably I'm no expert, but I believe that that $10,000 very likely will be taxable income for you and not be tax-deductible for them. Your coworkers may have made the donation via a tax-exempt organization, but it doesn't sound like it. If not, and assuming you made enough total money this year to be taxed at all, then yes, it will probably be taxed just as if it were paid to you by the company.

If there's an HR rep at your company, he or she may be able to answer your question a lot better than I can, or you could talk to a CPA. Of course, the CPA begins to eat into the donations.

Talk to a CPA... You might not have to pay taxes on the donated money because it could be considered a gift, but I suggest that you ask a CPA rather than the IRS! .

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Do I have to pay taxes on money inherited from another coutry.

I am currently employed with the company that has my 401k. Can I still get the money for reasons other than "hardship"?

My father just died and had sold his house and had put it into a trust. Will I have to pay taxes on this money?

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