Tax implications of non-charity memorial fund

[Blue]

A friend just passed away & an account was set-up at the local bank to
assist with monetary contributions to the surviving family.

Close friends & family are encouraging each other to forego this
account due to tax worries... "She'll have to pay taxes on those
gifts... I'll just give her cash" sort of thing.

This isn't a trust, charity, etc, just merely an account so people can
easily donate to the family.

I suppose a call to the bank would be best place to ask... but my
understanding is that this account would be no different than personal
gifts; $12,000 tax-free gift limit per year, gift-taxes generally due
from gift giver, not recipient, etc.

Correct?

[smit...@aol.com]

Correct. Note also that, since this not a charitable organization,
none of these gifts are tax deductible by the givers.

[Paul Thomas, CPA]

"Blue" <Bl...@set.hut> wrote

Correct......call the bank and ask. Some banks have a charity already set
up to handle these types of donations for sick or injured persons as well as
other special events where charitable donations are requested. Sometimes
the account is set up and maintained by other charities. You'll only be
guessing as to the deductibility of any contributions till you ask someone
who knows.

Gifts received, either in cash directly, by check, or from the bank or other
institutions are not income to the recipient. Where this misunderstanding
about gifts received being included in their income is unknown, as is why it
keeps being perpetuated across society on a daily basis just amazes me.

--
Paul A. Thomas, CPA
Athens, Georgia