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Do we have to claim fundraising donations given to us on our taxes?

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Do we have to claim fundraising donations given to us on our taxes?

Postby baeddan » Tue Sep 06, 2011 5:21 am

My husband was recently diagnosed (5/1/11) with a malignant brain tumor and has been referred to MD Anderson for care. We've made 2 trips to Houston from New Orleans already in a month and have to return there again week after next for another brain surgery. Of course the medical bills are piling up as this next surgery will be his 2nd brain surgery in 2 months and we have out of pocket expenses involved with each trip (gas, meals, lodging, etc.). My sister-in-law has informed us that she has planned a benefit to raise money for us, which was a surprise to us. She's been working on it for a couple of weeks and just told us about it a few days ago. She's gotten prizes donated that she plans to raffle off as well as doing a 50/50 raffle and now I'm wondering what my husband and I will need to do with regards to our taxes as we intend to be claiming our medical expenses and such. I'm just not sure how benefits work, legally and such and I doubt she has pursued finding out the legalities involved. Do we have to claim this as income? We just don't want to get into any tax trouble. My SIL & BIL are both in the restaurant business so they know a lot of people, have access to many vendors and I'm told they received prizes and such from them to raffle off. Again, I'm sure she's just doing all this through her friends and work connections - so basically we'll be receiving like a lump sum that she collected from the cover charge at the door and raffle money collected and I didn't know how that would affect us on our taxes. Despite how she got what she got on our behalf, (I mean, I do NOT know if those that donated prizes or services are looking to claim what they gave), I just wanted to make sure we do the right thing on our end.

Thank you kindly for your time.

Shay


(Sorry for the repost: There were errors when I tried to add to this earlier, so I just started over)
baeddan
 
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Do we have to claim fundraising donations given to us on our taxes?

Postby leyman » Tue Sep 06, 2011 5:27 am

As long as she tracks that no one gives you a gift over $13,000 (from single legal entity or individual), you don't pay taxes on that.
leyman
 
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Do we have to claim fundraising donations given to us on our taxes?

Postby giovany » Tue Sep 06, 2011 5:32 am

If YOU are soliciting the donations yourself, it's taxable income to you. The IRS views that the same as begging or pan handling -- i.e. self-employment income.

If someone else has a fundraiser (not at your request) and gives the funds raised to you, those are considered gifts and are not taxable to you.

In no case is any of the money tax deductible by the donors.

As long as none of the donors made a gift in excess of $13,000 there would not be any tax implications for anyone at all. Gift taxes are assessed on the donors, not the recipients.

BTW, that "Athel" character from your previous post is a spammer and that post was dropped by a spam-bot. That link had nothing to do with your issue and has been deleted.
giovany
 
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Do we have to claim fundraising donations given to us on our taxes?

Postby shen21 » Tue Sep 06, 2011 5:45 am

since this is a repeat of a previous post which apparently was deleted, the money given to you for your medical bills is a gift and not taxable to the recipient
the charitable event is not one in which the donors will have any means to claim as a charitable donation since to individuals is not permitted and your sil probably does not have a non profit status approved by IRS
shen21
 
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Do we have to claim fundraising donations given to us on our taxes?

Postby ahanu » Tue Sep 06, 2011 5:53 am

You do not have to report actual gifts (donations for which the giver does not receive anything). You do have to report money that you are paid for doing something and money that you make in a raffle (raffles are a form of gambling, and money from gambling is taxable income). However, it sounds like your sister-in-law is the one making money in a raffle and the one being paid to do stuff, and then she is giving you the money, so you are not required to report it on your taxes, but she is required to report it on her taxes (I do not think she will, but that is not your problem).
ahanu
 
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Do we have to claim fundraising donations given to us on our taxes?

Postby bryne » Tue Sep 06, 2011 6:02 am

Yes, income from fundraisers is taxable. It's solicited, so does not qualify as a gift.

Good luck - sure sounds like you've got a lot on your plate these days.
bryne
 
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Do we have to claim fundraising donations given to us on our taxes?

Postby garran » Tue Sep 06, 2011 6:08 am

financial assistance must be claimed, talk to a tax creditor over the issue of how to write it up
garran
 
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Do we have to claim fundraising donations given to us on our taxes?

Postby devlin » Tue Sep 06, 2011 6:10 am

These are "donations" not "gifts". Many of the people don't even know you so they wouldn't be "gifting" you.
You are not a recognized non-profit, which makes this taxable income to you.

Talk to a tax professional on how to handle it.
devlin
 
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