gift income

[gman]

Taxpayer receives rent from a house parent owns. Parent calls it a gift, but 1099 is issued in
taxpayers name and social? Any suggestions on how to handle this? Rent is 4500.

[FEDUKE404]

Nice try

Taxpayer receives rent from a house parent owns. Parent calls it a gift, but 1099 is issued in taxpayers name and social? Any suggestions on how to handle this? Rent is 4500.

Sounds like parental unit has some taxable income they're trying to dodge. . .

(Any true "gift" is a separate issue to your client.)

Of course, depending upon what is shown on the "taxpayers" Form 1099-MISC, the name on that tax document might be staring down the barrel at some serious taxable income with zero writeoffs.

Did their barber tell them this was a good idea?

FE

[gman]

other gifts

Taxpayer has a lot of income and parents have gifted several items, including homes in which taxpayer has sold and paid
tax on. Someone needs to pay the tax, just not sure how to handle it. It is not a substantial amount of money and taxpayers
and spouse are both professional people with well paying jobs. They state it is a gift, but apparently someone gave
the rental company their name and social. I will discuss to them that maybe the 1099 needs to be in parents names.

[Y2KEA]

The parents have schedule E income. If there are losses, with their high income, it is probably suspended so no immediate write off. Sounds like the parents are confusing gifting, tax avoidance with tax evasion.

[FEDUKE404]

Bingo !

The parents have schedule E income. If there are losses, with their high income, it is probably suspended so no immediate write off. Sounds like the parents are confusing gifting, tax avoidance with tax evasion.

...and there are obviously annual limits to and long-term tracking of all "gifts" these creative parents are using.

OTOH, telling the "giftee" he now has $4,500 of taxable, ordinary income from said Form 1099-MISC might also get things moving.

FE

[taxxcpa]

It has to be income to someone--either the parent or the child.
If it is not income to the child, then a corrected 1099 should be requested changing it to the parent.

I had a variation of this situation in which a client got a 1099 in his name which he had included as income in a corporation he owned. He was able to get the payer to issue a corrected 1099.

[taxxcpa]

It has to be income to someone--either the parent or the child.
If it is not income to the child, then a corrected 1099 should be requested changing it to the parent.

I had a variation of this situation in which a client got a 1099 in his name which he had included as income in a corporation he owned. He was able to get the payer to issue a corrected 1099 using the corporation's EIN (even though corporations don't get 1099s)

[TXEA]

Parent should be reporting the income. The fruit is attributable to the tree it fell from. The parents are the tree.

[Burke]

Taxpayer receives rent from a house parent owns. Parent calls it a gift, but 1099 is issued in
taxpayers name and social? Any suggestions on how to handle this? Rent is 4500.

Couple of questions: how did "they" get his SSN? And what kind of rent is this? A residential property? It appears that rent is paid to an agency, and they issue the 1099's, which is correct. And I agree with others, it goes to the parents. The agency is apparently drawing the checks to the son, which is why the 1099 is going to him.

[taxea]

I agree with all of the above. The 1099 should go to the property owner parents and they can then gift it to the son. Considering the amount on the 1099 is it possible that they are only gifting the son a portion of the total rent? What are they claiming as rental income if the 1099 is going to the son?