Gestational Surrogacy

[garman22]

Hi All. I was curious as to whether anyone has dealt with Gestational Surrogacy in the past before? Can anyone point me in the right direction or have any insight they might share. 

I get conflicting info as to taxability. I think it is but.....

Thanks!!

[TaxGuyBill]

Can you clarify what exactly you are looking for?

Are you asking how the payments a person receives for carrying someone's baby should be treated for tax purposes?  Or are you looking at some other aspect of it?

[garman22]

Thanks @TaxGuyBill 

I guess I was just asking for others thoughts on taxability. I read that some tried "gift" approach and the courts siding with IRS or others trying "pain and suffering" using and IRC code which didnt fly either. 

I have not contacted potential client as of yet....just trying to gather my thoughts on the subject.

[TaxGuyBill]

It has been a while since I looked into it, but money paid to the surrogate is almost definitely taxable. 

Whether or not it is a "business" on Schedule C and subject to SE tax or not is the bigger question.  I suspect that if it is just a one-time thing, it would usually be "other income" (not subject to SE tax). 

[IRonMaN]

This was talked about a few times in the old forum.  But this is the new forum and that old stuff is either gone or just can’t be found through the search function.

[garman22]

Thank you my friend. Thats what my reading has brought me to as well. I also believe in taxability. 

I did also see the SE debate as well. I side with you as well in that as long as its a one off, we tax fed/state rates and call it a day. 

[garman22]

Even the new forum is hard to get around. They've made this place harder with more bugs than the original. I feel for the current moderators........sinking ship and all. 

Thankfully we can address most problems here rather than relying on CSR.