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The tax on the phone however is significantly lower than the tax on a brand new car and most people shouldn't notice the impact on their tax return documents fr
by cstejerean 17y ago
The tax on the phone however is significantly lower than the tax on a brand new car and most people shouldn't notice the impact on their tax return documents from a several hundred dollar gift.
- Retric 17y agoYou don't pay tax on gifts only winnings. In the US giving someone that does not work for you up to ~12k/year is tax free, but the person giving the gift needs to pay tax on gifts larger than that. With some paperwork there is a lifetime exception up to 1 million but it comes out of the estate tax exemption. So, if Bill Gates gave his child 1 billion Bill would need to pay ~400 million to the IRS. However, there is an exception for anyone you are married to, and I think educational / heath care gifts are also excluded. PS: I don't know if it counts as a "prize" or a "gift" if you hand it out to everyone that shows up, but I just wanted to make the difference clear.