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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29569
Experience:  Taxes, Immigration, Labor Relations
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If we have given my sister in law money out with our

Customer Question

If we have given my sister in law money for helping out with our daughter and we have never claimed it as an expense, is that a problem? I don't know if she reports this income, but that's up to her. We just gift her the money. Could we get in trouble?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

In the US - gift - is not taxable income for the recipient and you do not need to report it on the tax return.

There is no any amount limit.

It does not matter how the gift is transferred - as long as that is a gift - there is NO income tax liability.

Expert:  Lev replied 1 year ago.

Please see for reference IRS publication 525 -

Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you.


HOWEVER - we need to be clear is that was a bona fide gift and NOT a payment for services - if that was a payment for services - the tax treatment is different.


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