Expert: Jay Allen Finn, CPA - 6/28/2009

Question
Dear Mr. Finn

An elderly couple are without children who will help them with all sorts of little things. They are very wealthy and kind. I never asked a dime for gas or anything, but helped them without any financial compensation. I just wanted to help as did my partner. We nearly fell over when I was given a $60K check made out to me for the purpose of buying a pickup and warranty for my partner and me for business and to keep me safe in travel. We were to be able to leave work to help them when needed.

The couple were going to pay the gift tax. However, since then the husband has passed away and the wife is no longer capable. The court has given the direction of their estates to her relatives.

What form and how much of the funds should I/we declare as income? I have little income myself now with the economy upsidedown.
Thank you in advance for any ideas and help you might offer. I want to do this correctly.

Cordially,

Lee

Answer
Lee,

The person who gave the gift (donor) is required to file Form 709, "United States Gift Tax Return", if the amount given was over $12,000. In your case, the donor's relatives would be required to file this form and pay any gift taxes required. Since it was a gift, you are not responsible for paying any taxes on the amount received.