Benefit for Mom - Cancer

[zeros]

Client has mom that developed cancer and is now unable to work. They want to have a fundraiser to help pay the bills. What has to be done so this effort would not be a taxable event? Any advice will be appreciated.

[Dusty2004]

Why would it be taxable?

Would not any money received be a gift? Or are they going to provide a service for the gift like a dinner or something?

Dusty

[Lion]

Gifts

Anyone can give gifts to as many people as they want, and the donor doesn't have to file a gift tax return if he stays within the annual and lifetime limits. Anyone can receive gifts without them being taxable income.

If you're hoping to make the gifts tax deductible, that's not going to happen under the circumstances you outlined.

[zeros]

Taxable to Organizers?

From what I understood, they were going to have some kind of venture that they would make money and then donate it to the parent. Would the making of the money ever be taxable. I know it wouldn't be taxable to the recipient.

[Lion]

Services

If I receive money for services or products, I receive taxable income. If I receive a gift and provide nothing in return, I have a nontaxable gift.

If I receive money for services or products and then give away that money, I still have taxable income and I might or might not have to file a gift tax return depending on the amount given. I will not have a deductible charitable donation unless I donate to a recognized charity.

[Gary2]

One more tidbit: If you pay a medical care provider (hospital, doctor, etc.) directly for another person's medical treatment, it is exempt from the gift tax.

[Roberts]

From what I understood, they were going to have some kind of venture that they would make money and then donate it to the parent. Would the making of the money ever be taxable. I know it wouldn't be taxable to the recipient.

Who do you think it would be that incurred this tax?

[DaveO]

If you charge an admission to the event then you would have taxable income to the organizer. That's why these things are usually done with a free will donation or "suggested donation" method. A dinner or concert at which the collection bucket is passed would not result in taxable income. Charging $10 per plate would. You also need to be aware of sales tax issues then.

[zeros]

The Organization or Individual that earned the money?

Who do you think it would be that incurred this tax?

The Organization or Individual That Earned the Money?