How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Megan C Your Own Question
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
23669918
Type Your Tax Question Here...
Megan C is online now
A new question is answered every 9 seconds

I have a sister-in-law that is unable to work because she has

This answer was rated:

I have a sister-in-law that is unable to work because she has two disabled children. We have had several people wanting to donate money to help her out, specifically to purchase a wheelchair accessible van. I approached a bank to set up a bank account for these donations. They set the account up in my name with my sister-in-law as an additional signer. The account was set up with an EIN number and they checked the "for banking purposes only" option on the SS-4 form. All money received into this account will go to help my sister-in-law purchase a handicap accessible van. I have several questions regarding this scenario. Do I have to set up a legal entity for this account? What additional forms will I be required to submit to the IRS? Will I have to file a tax return for this account? Will the donations from this account be taxable to me?

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

How are you today?

MyVirtualCPA :

There is no need to file any paperwork to set up this account - you do not need a legal entity

MyVirtualCPA :

You will not submit any forms to the IRS, these are all gifts and as such are not taxable

MyVirtualCPA :

No tax will be paid on the income received, as they are gifts

MyVirtualCPA :

However, the gifts are not deductible to the donor because you are not a charity

Customer:

Great. that answers my questions.

MyVirtualCPA :

I'm glad. If you would, please rate my response as "excellent" as this will give me credit for assisting you today

Customer:

sure. no problem.

MyVirtualCPA :

Thanks!

Megan C and 2 other Tax Specialists are ready to help you
Paul,

Thank you for requesting me directly, and thanks for the positive rating. Please come back and see me any time you need a tax, finance, or social security question answered. It was a pleasure working with you today.

Related Tax Questions