Thesaints wrote: ↑Wed Mar 27, 2019 1:11 am
If you handed them a check, it certainly is a reportable donation.
If you paid for a vacation where they came with you, it is a lot less certain.
Treating members of the family, or otherwise close relatives and even friends, to certain activities especially when they are enjoyed togethr, is considered part of someone's ordinary life and does not generate taxable donations.
That is what my tax/estate guy told me. Not just general 'ordinary life', but specifically that you can consider inviting people along for a vacation, or dinner, to be for your own purposes, their company. If you *send* somebody on a vacation (like pay for a kid's honeymoon), that's definitely a gift.
Here's a blog post quoting an estate attorney giving a similar analysis for paying for a wedding, directly to wedding service providers:
"If the parents contracted with wedding vendors and paid them directly, the parents could reasonably argue the money was not a gift because they were fulfilling a “perceived cultural obligation,” says Steve Harnett, associate director of education with the American Academy of Estate Planning Attorneys. Or they could argue the party was as much for them as for their children."
Although it also gives this rationale which might not sit as well with sticklers:
"In practice, the tax professionals I spoke to have never seen weddings reported on gift-tax returns, nor have they seen any rulings or court decisions on the subject."
https://blog.sfgate.com/pender/2013/05/ ... -gift-tax/
That is to say, high horses sometimes get saddled up when anyone starts with 'in practice' about tax rules
. But the plain reality is tax rules aren't always 100% clear, there's no moral obligation to lean in the direction of paying more when they aren't clear, and you can't say it's 'dishonest' or 'evasion' not to report something until you've clearly demonstrated it's legally required to report it. The only moral obligation in tax paying is to follow the law. When it's not wholly clear what the law requires, then moral scolding should go out the window, IMO. You can *practically* say it's desirable to avoid possible hassles with the IRS even on things where you might be right, but then it's back to practicality, part of which is the likelihood the thing in question would ever be challenged.