Opened Bank Account-Received Gift-Taxable

[zeros]

Would it be taxable if a person received, say, $10 in interest and a pen worth $50 for opening a bank account? I would assume the interest would be, but how about the value of the pen? In Publication 17?

[Gary2]

Would it be taxable if a person received, say, $10 in interest and a pen worth $50 for opening a bank account? I would assume the interest would be, but how about the value of the pen? In Publication 17?

Yes it's in Pub. 17.

May I suggest following up on the "Filing Requirements - Age?" thread that you started. The discussion there was hoping for a response from you on what the expected answer was.

[Gene V]

, but how about the value of the pen? In Publication 17?

Publication 17, page 57
The value is determined by the cost to the financial institution.
The value and interest should be showed on the 1099-INT.

[zeros]

Expected Response?

Yes it's in Pub. 17.

May I suggest following up on the "Filing Requirements - Age?" thread that you started. The discussion there was hoping for a response from you on what the expected answer was.

It was a test question and the correct answer was not available. I chose "false." I was not really sure what the answer would be, thus, I posted it in the Forum.

[oceanlovin'ea]

1099-int

Yes, the financial institution will issue a 1099 to the individual with the value of whatever they received, whether it is a pen or a toaster or $50 in their account.

I have had several people come in with 1099 and didn't realize that they would receive one for opening the account and getting a "gift".

Linda, EA

[FEDUKE404]

Reporting levels

Yes, the financial institution will issue a 1099 to the individual with the value of whatever they received, whether it is a pen or a toaster or $50 in their account.

I have had several people come in with 1099 and didn't realize that they would receive one for opening the account and getting a "gift".

Linda, EA

Interesting...

What was the smallest dollar amount shown on such Forms 1099 that you have encountered? Did it say something like "two coffee cups, one ballpoint pen, and one letter opener"?

I always thought there was a reasonable de minimis level. I cannot imagine my stockbroker preparing a Form 1099 for the (very nice!) ball point pens I generally manage to "retain" (with his blessings) on my very infrequent visits to the office.

FE

[oceanlovin'ea]

These were people who had responded to ads such as: Come open a new account at XXX bank and we will deposit $50 in your account. or Get a gift of $100 when you open a new account at XXX Bank.

It was not for picking up a pen or something insignificant. But I am sure that they did not know that the gift they were receiving would be considered income to them. They didn't understand why they got the 1099.

Linda, EA

[JohnH]

This thread reminds me of a conversation a few years back. I had bought some small imprinted LED flashlights to give customers of my other business activity. I was having lunch with an accounting/tax client who had been though a very involved audit the year before. I happened to have one of the flashlights in my pocket so I gave it to him.

He liked the flashlight much he was thinking of buying some for a promotional giveaway to his customers, so he asked how much they cost.

I replied, "I generally pay around $2.50 each for them in bulk, but that one cost you about $6,000."