BST: Question about Gifting for referral of sale?

[Henry Quigley]

Scott,
 
I think R C Smith Jr has the shoe on the wrong foot. You can call the
IRS and describe the "transaction" to them on the phone and they will give you
a quick read.
 
Again, you do nothing wrong and owe no tax by making the
payment. But the IRS rules require you to 1099 the recipient for a payment of
that amount.
 
IMHO
 
Henry



----- Original Message ----
From: R C Smith Jr
<rcsmith at garrett-smith.com>
To: Buy-sell-trade
<trawler-buy-sell-trade at lists.samurai.com>
Sent: Monday, September 8, 2008
10:26:55 PM
Subject: Re: BST: Question about Gifting for referral of sale?
Henry Quigley wrote:

> 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.

Scott,

You got the thinking cap on, buddy. And
Henry (above) has the shoe on the
wrong foot. 

Scott, you can call the
payment anything you want and, as long as you are
not claiming a deduction of
the "gift" on your return, you are not doing
anything wrong. The recipient has
the burden of deciding whether tax is due
for him...and that ultimately has
nothing to do with you.

IMHPO, of course...

Scott, enjoyed the lunch in
Annapolis...have fun on the rest of the cruise.

Bob
____________________
R C
Smith Jr
M/V MARY KATHRYN
1977 Hatteras 58 LRC
South River
Annapolis, Md
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