maximum gift you can give your client if you are a tax preparer

[remove ps]

The maximum gift you give is $25 per client (you can give more, just
can't deduct it). If you are a tax preparer and do a return for a
couple, can you give $50, and if they have kids whose names appear on
the 1040, then you can give an additional $25 for each kid? It makes
sense, then again, you can say that a gift to a client is a give to a
company and all of its employees, so you can give and deduct a lot more
than $25 by this logic.

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[Alan]

On 5/17/2013 10:03 AM, remove ps wrote:
> The maximum gift you give is $25 per client (you can give more, just
> can't deduct it). If you are a tax preparer and do a return for a
> couple, can you give $50, and if they have kids whose names appear on
> the 1040, then you can give an additional $25 for each kid? It makes
> sense, then again, you can say that a gift to a client is a give to a
> company and all of its employees, so you can give and deduct a lot more
> than $25 by this logic.
>

Indirect gifts are precluded by Sec. 274 and its regulation unless you
can show that a bona fide business connection exists with the spouse
and/or children.

Based on my interpretation, I think you can show a bona fide connection
to the spouse but not to the kids.

Here's the Reg.

(e) Gifts made indirectly to an individual�(1) Gift to spouse or member
of family. If a taxpayer makes a gift to the wife of a man who has a
business connection with the taxpayer, the gift generally will be
considered as made indirectly to the husband. However, if the wife has a
bona fide business connection with the taxpayer independently of her
relationship to her husband, a gift to her generally will not be
considered as made indirectly to her husband unless the gift is intended
for his eventual use or benefit. Thus, if a taxpayer makes a gift to a
wife who is engaged with her husband in the active conduct of a
partnership business, the gift to the wife will not be considered an
indirect gift to her husband unless it is intended for his eventual use
or benefit. The same rules apply to gifts to any other member of the
family of an individual who has a business connection with the taxpayer.

[bill *]

On May 17, 12:03�pm, "remove ps" <removeps-gene...@yahoo.com> wrote:
> The maximum gift you give is $25 per client (you can give more, just
> can't deduct it). �If you are a tax preparer and do a return for a
> couple, can you give $50, and if they have kids whose names appear on
> the 1040, then you can give an additional $25 for each kid? �It makes
> sense, then again, you can say that a gift to a client is a give to a
> company and all of its employees, so you can give and deduct a lot more
> than $25 by this logic.
>

The maximum gift you can give your client, or anyone else, is all you
own plus all you can borrow.

You are not, of course, giving a gift to your client or you wouldn't
be concerned with how much you can deduct. I disagree with Alan. In
my opinion, you have one client, which happens to be a married couple,
therefore you can make one $25 gift that is deductible on your
business's tax return.

[Stuart Bronstein]

"bill *" <bi...@hollandbrowncpa.com> wrote:

> The maximum gift you can give your client, or anyone else, is
> all you own plus all you can borrow.

Well, ok, that may be technically correct. But you can't write it
off as a business gift. And if it gets to be too high in value, you
may even incur gift tax.

> You are not, of course, giving a gift to your client or you
> wouldn't be concerned with how much you can deduct. I disagree
> with Alan. In my opinion, you have one client, which happens to
> be a married couple, therefore you can make one $25 gift that is
> deductible on your business's tax return.

Alan quoted a regulation that specifically said that if you have a
legitimate business relationship with both spouses, you can give a
separate gift to each and they will not be aggregated.

--
Stu
http://DownToEarthLawyer.com

[Bill Brown]

On May 18, 5:08 am, Stuart Bronstein <spamt...@lexregia.com> wrote:

> "bill *" <b...@hollandbrowncpa.com> wrote:

> Alan quoted a regulation that specifically said that if you have a
> legitimate business relationship with both spouses, you can give a
> separate gift to each and they will not be aggregated.
>

And I submit that doing a joint return is a business relationship with
an entity that is both spouses which is different from a business
relationship with each spouse.

[Alan]

On 5/19/2013 6:25 AM, Bill Brown wrote:
> On May 18, 5:08 am, Stuart Bronstein <spamt...@lexregia.com> wrote:
>> "bill *" <b...@hollandbrowncpa.com> wrote:
>
>> Alan quoted a regulation that specifically said that if you have a
>> legitimate business relationship with both spouses, you can give a
>> separate gift to each and they will not be aggregated.
>>
> And I submit that doing a joint return is a business relationship with
> an entity that is both spouses which is different from a business
> relationship with each spouse.
>

The regulation does not discuss gifts made to an entity, a taxpayer or a
client. The regulation discussess gfts made to an "individual" directly
or indirectly in which you ave established a business relationship. I
continue to take the position that a $25 gift made to the husband and a
$25 gift made to the wife with whom you have established a business
connection would be dedutible. I see no difference between preparing a
joint return or separate returns to deduct the gift as a business expense.

[Bill Brown]

On May 20, 6:49�pm, Alan <tempu...@vacationmail.com> wrote:
> On 5/19/2013 6:25 AM, Bill Brown wrote:> On May 18, 5:08 am, Stuart Bronstein <spamt...@lexregia.com> wrote:
> >> "bill *" <b...@hollandbrowncpa.com> wrote:
>
> >> Alan quoted a regulation that specifically said that if you have a
> >> legitimate business relationship with both spouses, you can give a
> >> separate gift to each and they will not be aggregated.
>
> > And I submit that doing a joint return is a business relationship with
> > an entity that is both spouses which is different from a business
> > relationship with each spouse.
>
> The regulation does not discuss gifts made to an entity, a taxpayer or a
> client. The regulation discussess gfts made to an "individual" directly
> or indirectly in which you ave established a business relationship. I
> continue to take the position that a $25 gift made to the husband and a
> $25 gift made to the wife with whom you have established a business
> connection would be dedutible. I see no difference between preparing a
> joint return or separate returns to deduct the gift as a business expense.
>

You may be correct, Alan. The question then comes down to whether or
not preparing a joint return creates a business relationship with both
individuals or just the one writing the check to the preparer.
Clearly, you believe it does. I could be convinced.

[Stuart A. Bronstein]

Bill Brown <w.p.br...@gmail.com> wrote:

> Alan <tempu...@vacationmail.com> wrote:
>>
>> The regulation does not discuss gifts made to an entity, a
>> taxpayer or a client. The regulation discussess gfts made to an
>> "individual" directly or indirectly in which you ave
>> established a business relationship. I continue to take the
>> position that a $25 gift made to the husband and a $25 gift
>> made to the wife with whom you have established a business
>> connection would be dedutible. I see no difference between
>> preparing a joint return or separate returns to deduct the gift
>> as a business expense.
>
> You may be correct, Alan. The question then comes down to
> whether or not preparing a joint return creates a business
> relationship with both individuals or just the one writing the
> check to the preparer. Clearly, you believe it does. I could be
> convinced.

Personally I doubt that the type of return they file has anything to
do with it. This, as so many things, should be based on facts and
circumstances rather than a technical decision made for other
reasons.

--
Stu
http://DownToEarthLawyer.com