"Gift" from a Church Member to a Church Employee

Church member gifted a church employee $10,000. Check was made payable to the church. Is this a tax deduction for the member? and is the employee who receives the check I make payable to him responsible for tax? Should I be processing this thru payroll? How do I as the bookkeeper handle this transaction?

Comments for "Gift" from a Church Member to a Church Employee

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May 27, 2015
Gift Designated for Church Employee
by: MarcusNtexas

This would not be unlike a grandparent making a "charitable" gift to a university with directions that it be used as a "scholarship" for one of my grandchildren. Such "gifts" are not allowed by universities and it is probably illegal for the donor to count it as a charitable deduction, and as far as I know, reputable universities would not accept a gift that was designated for the donors grandchild.

Seems to me that the same general rule applies in this case. I realize that this could be a situation where the employee is in need of financial help and the church member wishes to make an anonymous gift and does not want to give the employee a personal check or cash. It is possible that as bookkeeper you could write a check to the employee as a "gift" from a member wishing to remain anonymous; however, the member should be advised that such a gift cannot be treated as a charitable gift to the church. In this case, it would not be necessary to run it through the payroll system since it is within the limits for gifts under IRS rules and regulations; HOWEVER, as bookkeeper, you should have a confidential discussion with the pastor and with other members of the church's stewardship/budget committee before acting. You will need their backing when you inform the church member that his / her gift cannot be considered a charitable contribution for tax purposes.

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