gifts considered for Roth-IRA
I have a client who is a Pastor and his income is strickly on gifts, no salary. He files taxes for the gifts.
Do the gifts count as income so he can fund a Roth-IRA ?
Thank you,
Douglas
I have a client who is a Pastor and his income is strickly on gifts, no salary. He files taxes for the gifts.
Do the gifts count as income so he can fund a Roth-IRA ?
Thank you,
Douglas
Permalink Submitted by Alan Spross on Thu, 2008-03-20 19:49
There is considerable debate regarding the status of gifts to pastors as taxable compensation, and therefore whether they should be reported. If however, the pastor reports the gifts as income, I doubt very much if the IRS is going to question an IRA contribution, particularly since the source of the gifts are congregation members receiving services.
In some ways this is analagous to the IRS’ policy of looking the other way when it comes to a child’s IRA contributions, if allowances really reflect the value of work performed etc.