Legal Question in Tax Law in Illinois

Re: Financial Gifts

What do you mean financial gifts? If a gift is truly a "gift," then the recipient of the gift does not report the gift as income. The person making the gift (the donor) may have to file a gift tax return and may have to pay gift tax on the gift.

However, many people misuse the term "gift" to include events where there is some intent to benefit the recipient in a way that is not out of love or charity. For example, if your employer makes a 'gift' to you, it is not really a gift. it is essentially a bonus, and is taxable to you just like every other payment your empolyer makes to you.

So you need to be very careful to make sure that what youe ar calling a gift is really a gift under the tax code.

David K. Staub, Illinois business attorney