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#93371 - 07/01/03 04:42 PM Gift for New Account
AMXSteve Offline
Member
Joined: Jun 2001
Posts: 75
Wilmington, OH, USA
I have searched and read several threads concerning gifts/ bonuses for accounts in addition to reading the "Paying a Bonus on Deposit Accounts" article. I'm needing clarification. If the fair market value of the gift meets the definition of a "de minimis premium" - non-cash and fair market value less than $10 - is the gift considered interest by the IRS? Does the fair market value of the gift need to be aggregated with any other interest the account earns and reported on a 1099? It's my understanding that the value of the gift is not considered interest if the gift meets the definition of "de minimis permium." Is this correct?
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AMXSteve

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#93372 - 07/01/03 06:12 PM Re: Gift for New Account
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,893
Galveston, TX
Quote:

It's my understanding that the value of the gift is not considered interest if the gift meets the definition of "de minimis permium." Is this correct?




Yes
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#93373 - 07/01/03 08:46 PM Re: Gift for New Account
Tisa Offline
Platinum Poster
Tisa
Joined: Jun 2003
Posts: 938
Do you know the way to ...
If you need the citation, it's IRS Rev Proc 2000-30.

Last year, we had to deal with adding the cost of $25 gift certificates to YDT interest earned, and it wasn't fun.

Good luck!
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Just a lowly 1st Year Law Student ("1L"), so don't take anything I say seriously!

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