BST: Question about Gifting for referral of sale?

[David Ullrich]

Yeah, I tend to agree. Why not just offer a "commission" of $10,000" for a
referral? Do it legal and don't risk the ire of the IRS.

Dave


On 9/8/08, Henry Quigley <hqnp43 at yahoo.com> wrote:
>
> 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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-- 
David G. Ullrich
Cavu Consulting
"Finally, Affordable Technology Help"