Legal Question in Tax Law in California
Are donations for yoga teacher at church taxable?
I teach yoga at a church. I am not paid by the church, and the drop-in students are not obgligated to pay for the instruction. However, there is a ''donation basket'' at the door specifically for appreciation of the yoga. I take home the money in the basket. Is this taxable income or tax-free gift?
2 Answers from Attorneys
Re: Are donations for yoga teacher at church taxable?
The "free will" donation your students make to you is clearly income for services rendered. The payments are not made from a sense of "detached generosity" as characterizes transactions categorized as gifts for tax purposes, but in direct response to the rendering of services.
This issue most often arises in the case of clergy, and the regs. (at 1.61-a(1)) provide that "contributions" to clergy for services are taxable:
Sec. 1.61-2
Compensation for services, including fees, commissions, and similar items.
(a) In general.
(1) Wages, salaries, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses (including Christmas bonuses), termination or severance pay, rewards, jury fees, marriage fees and other contributions received by a clergyman for services, . . . are income to the recipients unless excluded by law.
Re: Are donations for yoga teacher at church taxable?
Unless you are registered as a non-profit, charitable organization, it is taxable income to you.
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