No SE tax on payments to Grand parents

[FEDUKE404]

Strange situation all around

Interesting - so the grandparents received something like $17k in one year (via Form 1099-MISC) for "expenses" ?? Sounds like a nice way to get some income from the State of Illinois!! ....and probably not mess up any Social Security receipts??

I'm gonna have to scratch my head on this one.

Following these guidelines could be like running through a minefield while wearing snowshoes.

BTW: I wonder if the parent had any Form 2441 expenses??

FE

[Zee]

to care for their granddaughter.

http://www.ustaxcourt.gov/InOpHistoric/STEELE.SUM.WPD.pdf

The question of what constitutes a trade or business is frequent topic here. The Steele v. Commissioner case is worth reading.

Hmmm...talk about "keeping it in the family". The state paid the grandparent's for childcare of their grandaughter. I wonder if the parent or parents were also living with the grandparents? From a preparer standpoint, I'd agree with the court.

I guess it would be good "family tax planning", although I hate the concept of placing the burden on taxpayers.

However, I can see this as being an area "ripe for fraud" .

[DaveO]

to care for their granddaughter.

http://www.ustaxcourt.gov/InOpHistoric/STEELE.SUM.WPD.pdf

The question of what constitutes a trade or business is frequent topic here. The Steele v. Commissioner case is worth reading.