Is Payment for Care Considered a Gift?
by Chris Cooper, Financial Planning Expert
May 05, 2016
Question: My father is paying me to handle and coordinate his care. Is that a gift as per tax regulations?
Answer: Because of the way this question is asked, you are saying you have not been declaring as income on your tax return the money your father has been paying you to handle and coordinate his care. You are really asking if you are in trouble?
The answer is no, you are not in trouble. It is gifting. Your father receives no tax benefit and you do not pay income tax as it is gift. Depending on your father’s income and tax situation he may be better to have you as a domestic employee, verses gifting. You will need to consult with a tax advisor.
Chris Cooper is the owner and founder of Chris Cooper & Company, Inc., a fee-only financial planning firm for elderly persons and the owner and founder of ElderCare Advocates, Inc. a private geriatric care management and long term care consulting firm. As a California Licensed Professional Fiduciary, Chris can serve as Conservator of the Person and Estate under court appointment, as Agent under a Durable Power of Attorney for Financial matters and Health Care matters.
See more of Chris Cooper's expert answers