Good evening. My name is ***** ***** I look forward to helping you. First, you don't need to worry about it being double-taxed. The question is who do they want to incur the tax burden
. If they are willing to pay the tax, then they would treat is as their income and then treat the payments to you as gifts to you of the income they receive. Gifts are not income under Section 102 of the Internal Revenue Code
. And, there would be no gift tax
consequences. Recipients of gifts are not subject to gift tax. And, there should also be no gift tax due from the donor. Each donor can give $14,000 per year per person under the annual gift exclusion. In addition to that, for any amounts in excess of the $14,000 in a year, each person has a $5,450,000 lifetime exemption....which means a person can give a cumulative amount of up to $5,450,000 in gifts over and above the $14,000 annual gift exclusion amount without incurring gift tax....the donor must file a gift tax return
to let the IRS
know how much of the lifetime exemption is being used, but there will be no gift tax until cumulative additional gifts have exceeded the $5,450,000. If they want you to incur the income, they would treat it as a payment to you for your services and then be able to take the deduction
for the payments to you against the income which would offset the income to them. Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). Otherwise, I receive no credit
for assisting you today. I thank you in advance for taking the time to provide me a positive rating!