BST: Question about Gifting for referral of sale?

[Henry Quigley]

Scott,
 
I'm not a lawyer and this is not legal advice.
 
My opinion is that
the IRS would say that you paid someone for the referral. That is compensation
for consideration. It doesn't matter what you call it and whether there is a
contract or not.
 
In addition they might consider it a fraudulent act. There
is no statute of limitations and the penalties are much more severe than just
forgetting to report it.
 
IMHO, this is definitely not a good idea.
 
Henry
 
----- Original Message ----
From: Scott E. Bulger <scottebulger at gmail.com>
To:
trawler-buy-sell-trade at lists.samurai.com
Sent: Monday, September 8, 2008
8:57:15 AM
Subject: BST: Question about Gifting for referral of sale?

I have
a question that I can't think of as appropriate for any other forum,
so I'll
ask those of you on this list to comment.



I'm currently selling my 40'
Nordhavn.  I'd like to get the word out and I'm
perfectly willing to pay a
reasonable "gift" in appreciation for finding a
buyer.  I have considered
using the language below to make people aware of
this "gift".  Can anyone
think of any reason this would be a problem?  As
far as tax laws go I can gift
anyone $10,000 without paying taxes on it.
Since I'm not entering into a
contract with anyone and I'm retaining the
right to give or not give the gift,
I can't see how this could be considered
"pay" or commission for assisting
with selling the boat.  All it is is me
saying, "hey I'm really happy you told
someone about my boat being for sale,
so here, take this!"



Here is the
proposed language:



Referral Gift:  Given there are three major boat shows
in the coming month,
the owner of Alanui will gift $10,000 to any person who
refers a successful
buyer for Alanui.  The gift will be made to only one
person who has provided
the lead either directly to the seller, or who has
told the prospective
buyer to mention their name.  The gift will be made
directly to the person
in the form of a cashier's check or bank wire.  The
gift is a token of
appreciation for encouraging others to consider Alanui for
purchase.  Since
this is a gift it will not be reported as income, nor will
any taxes of any
sort be withheld.  The seller reserves the right to be the
sole determinant
of who receives the gift.  





Finally, I'd be willing to
give this to anyone, Joe Blow, someone who works
for a broker, anyone.  I'd
simply use the first point of contact to
determine who really provided the
potential buyer and make the gift directly
to him or her.  Anyway, am I crazy,
or is this opening up a real can of
worms?



Scott Bulger, Alanui, N40II,
Seattle WA



www.nordhavn40forsale.com or

www.alanui.talkspot.com
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