You receive a monetary gift as appreciation or a thank you for something you did. Later, you receive a form 1099-MISC reporting that “gift” as other income to you and to the IRS. What does the recipient, in this case, do?
Gifts or awards or prizes for services not performed count as other income. If the gift is $600 or more, then its the payer’s responsibility to prepare and send a 1099-MISC reporting the value of the gift. The taxpayer must report this amount as other income on Form 1040.
Many people say “but it was a gift”. If the gift was $600 or more, the payer was legally obligated to report this.
