pay for reception, a gift?

[Vic Dura]

Hello folks,

My daughter will be getting married in November and my wife and I will
be hosting and paying for the wedding reception (I'm stunned at how
much these things cost). Is that considered a gift to her and/or her
husband?

It seems like it wouldn't be because

1) my wife and I are the ones throwing the party (reception) and we
are inviting the people, including my daughter and her husband, and

2) there is no direct benefit to her other than gifts received from
attendees and such gifts are entirely optional.

Thanks for any comments.
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[Bob Sandler]

>My daughter will be getting married in November and my wife and I will
>be hosting and paying for the wedding reception (I'm stunned at how
>much these things cost). Is that considered a gift to her and/or her
>husband?

Congratulations.

No, the wedding reception is not a gift to your daughter, at
least not as far as gift tax is concerned, which is what I
assume you are really asking about. Here's how Pub. 950
defines a gift.

"The gift tax applies to transfers by gift of property. You
make a gift if you give property (including money), the use
of property, or the right to receive income from property
without expecting to receive something of at least equal
value in return."

By giving the reception, you are not transferring any
property to your daughter, so there is no taxable gift.

Bob Sandler

[Barry Margolin]

In article <o2r2p89pmi5obo2dk...@4ax.com>,

Bob Sandler <bob_u...@yahoo.com> wrote:

> By giving the reception, you are not transferring any
> property to your daughter, so there is no taxable gift.

It's interesting that there's a tax difference between:

A writes a check to B, who performs a service for C.

and

A writes a check to C, who writes a check to B, who performs the service
for C.

I suspect the OP was concerned that the IRS might view the first
scenario as a tax dodge, equivalent to the second scenario. But the
difference is that in the second scenario, C is not forced to give the
cash to B. Once they receive the money, they can do with it as they
please. Giving someone property is different from paying someone to give
them a service (having a service performed for you doesn't increase your
net worth).

--
Barry Margolin
Arlington, MA

[Vic Dura]

On Mon, 13 May 2013 22:16:30 EDT, Barry Margolin <bar...@alum.mit.edu>
wrote in <barmar-FEAEB5....@news.eternal-september.org> Re
Re: pay for reception, a gift?:

>In article <o2r2p89pmi5obo2dk...@4ax.com>,
> Bob Sandler <bob_u...@yahoo.com> wrote:
>
>> By giving the reception, you are not transferring any
>> property to your daughter, so there is no taxable gift.
>
>It's interesting that there's a tax difference between:
>
>A writes a check to B, who performs a service for C.
>
>and
>
>A writes a check to C, who writes a check to B, who performs the service
>for C.

Good point. Actually since she lives 1100 miles away from us she will
be making all the arrangements on our behalf. We will then send her a
check to pay for the arrangements. However it is still our party with
the invitations issued from us.

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[Vic Dura]

On Mon, 13 May 2013 18:52:14 EDT, Bob Sandler <bob_u...@yahoo.com>
wrote in <o2r2p89pmi5obo2dk...@4ax.com> Re Re: pay for
reception, a gift?:

>>My daughter will be getting married in November and my wife and I will
>>be hosting and paying for the wedding reception (I'm stunned at how
>>much these things cost). Is that considered a gift to her and/or her
>>husband?
>
>Congratulations.

Thanks.

>
>No, the wedding reception is not a gift to your daughter, at
>least not as far as gift tax is concerned, which is what I
>assume you are really asking about. Here's how Pub. 950
>defines a gift.

And thanks for the comments and reference.

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[Bill Brown]

On May 13, 3:55 pm, Vic Dura <vpd...@CLUTTERhiwaay.net> wrote:
> Hello folks,
>
> My daughter will be getting married in November and my wife and I will
> be hosting and paying for the wedding reception (I'm stunned at how
> much these things cost).  Is that considered a gift to her and/or her
> husband?
>
> It seems like it wouldn't be because
>
> 1) my wife and I are the ones throwing the party (reception) and we
> are inviting the people, including my daughter and her husband, and
>
> 2) there is no direct benefit to her other than gifts received from
> attendees and such gifts are entirely optional.
>
> Thanks for any comments.
> --

If you are making a gift, you are making that gift to each and every
individual who is attending the reception. Unless the value of that
reception is more than $13,500 per person, the discussion of whether
gifts have been made is only an academic exercise.

Contributing to that exercise, food is property. Party favors are
property. The right to listen and dance to music is (intangible)
property.