Snowman
Well-Known Member
Yes. And the current gifting limit, at the receiving end is $15K, or was the last time I checked.But it was a gift, not a tip or any form of compensation... he made that clear. Gifts are not taxed to the recipient, they are taxed to the gifter, but there are large exemptions involved that get into complex federal tax regulations that, believe it or not, revolve around estate taxes.
You can gift up to $16,000 to any individual in 2022 and it is tax free to the recipient. The gifter is required to list gifts made each year. These gifts are then added into the estate value upon the gifter's death and taxed at that time. In reality, though, the lifetime exepmtion on the state tax is in the millions of dollars... so the vast majority of people have no need to report gifts and teh gifter cannot deduct teh gift on their taxes. The gift remains in the estate taxable value.
Any gifts below a certain threshold (I believe it's $15,000 now... used to be $10,000) are not required to be tracked on the gift tax returns..
As always, there are exception to the rules, and rules for the exceptions.
If "gifted" then the gift would not have split--as tips usually are, I think--among the staff, but would have come to the recipient alone.