Posted on 09/11/2007 1:22:33 PM PDT by the_devils_advocate_666
Last weekend a friend was seriously injured in a bicycling accident. A large group of friends are now in the process of creating a fund raising event to support his family and offset some of the ensuing medical bills.
I was looking for assistance in the best way to set up accounts for donations. The way I see it we have three options:
I think (but don’t quote me) that the only way to keep the IRS off your back is to set up some sort of a trust, and even then I suspect that any income over a certain amount is taxable.
I would think it would only be a problem for the family, tax-wise, if any individual donation was over $25,000 -— and, actually, the giver would pay that.
May be similar issues if there is a trust.
It is nothing life threatening but the wife was recently laid off and the husband will be out of work for at least a few weeks. They don’t have a lot of resources but some medical insurance will kick in after a thousand or so in deductible. So we’re just trying to raise a few thousand to see them through. Setting up a trust is probably more than is necessary I would think. And since it isn’t a huge amount of money maybe my fears are unwarranted and just giving them the money directly is fine. But I’m no tax attorney...
Is it possible to set up a third party as the recipient of deposits to a paypal account?
I don’t think they care who you give permission to use it after it is set up, if they are trustworthy or not is your call. The most the owner of the account would have to do is agree to it is all I beleive.
If your friend has a spinal cord injury, then here is where you should go.
National Transplant Assistance Fund, Catastrophic Injury Program.
I registered on FR (long time lurker - sorry!) so I can send you this information, so forgive me if I dont format the link properly... here it is
http://www.transplantfund.org/Catastrophic/index.cfm
They accept tax deductible contributions (people sending in the funds get the tax break) - they also qualify for company matching funds - it is all legit. They hold the funds in a special account. Your friend can send in expenses related to non-covered medical expenses and they will send him a check - only up to the amount of money that has been raised minus a very small administrative fee.
Hope this helps.
I think that answered my questions. Basically, as I understand it, the gift receiver is free and clear. If a gift giver gives over $12,000 then they (the gift giver) may have tax consequences to deal with. Thanks for your help!
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