What an incredible story has unfolded over the last few days here in WNY! Local Greece, NY (a suburb of Rochester, NY) school bus monitor, 68-year-old Karen Klein, has been awarded online donations from hundreds of thousands of people from across the globe after a cellphone video went viral this week, showing a group of junior high aged boys on the school bus brutally taunting her. More than $500,000 has now been raised online from donors wishing to help Kline take a well deserved vacation or fund an early retirement- an incredible amount of money! Read more about Kline’s story here.
Upon readng this story, I could not help but wonder right away, what the tax implications of this potential windfall may be? Maybe being at an accounting firm, that’s just the way my mind works now, but it’s literally the first thing I thought, and I wanted to see what one of our top tax professionals has to say.
I turned to tax guru Dave Barrett, CPA to find out some answers. Here’s what he has to say:
“The receipt of a gift resulting solely from the generosity of the donor (- i.e., not in exchange for services, etc) does not result in taxable income. The donors may not claim an income tax deduction inasmuch as the donee is not an IRS qualified charitable organization.”
We will see how it all unfolds and if Karen actually gets the donations made in her name!
How would you spend the money Karen Kline may receive and what do you think about the goodwill that has poured out from so many people from across the globe?
What a story!
Photo: ABC News