Originally posted by: HomeAppraiser
Originally posted by: ngvepforever2
He deserves that and much more.
Sounds about right. I believe if you get a gift of over $11,000 you have to pay Federal tax on it, so the $10,000 from Trump means he gets to keep all of it. I am not sure if the two other undisclosed checks would push that over the limit or if it is $11,000 per gift. A week at Disney cool. And scholarships for his kids, nice. An apartment make-over? I hope its not Queer eye.
If you get a gift of over $11,000 the GIVER has to pay tax on it (and the limit is $11,000 per person per year, and there is a $1 million lifetime threshold that factors in somehow too, I'm not entirely clear on all of it). The recipient doesn't have to pay taxes on a gift.
However you have to pay taxes on prizes regardless of value. I'm not sure how they draw the line between gifts and prizes. For instance, when Oprah gave away all those cars, the people who received them had to pay income taxes on them. That seems like a gift to me. If you got in on the free Vista/Office 2007 Microsoft was giving away (to developers only) for watching webcasts, you have to pay taxes on that even though it seems more like a gift than a prize.
So I'm not really sure how the line is drawn or whether the guy will have to pay taxes, all I know is the $11k threshold for the gift tax has nothing to do with it.