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My Client was an egg donor. She rec'd a 1099-NEC. How shall I take a deduction for mileage related to her clinic trips?

Ohhhhh
Level 2
 
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16 Comments 16
abctax55
Level 15

An oldie, but a goodie:

http://www.taxalmanac.org/index.php/Discussion_Taxability_of__Donating__an_Egg_Cell_(Ovum).html

"*******Tax software is no substitute for a professional tax preparer*******
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taxes96786
Level 9

How is this a donation if she got paid to do it? The income goes on 1040 line 21 as a one-time payment. The mileage is a donation reported the normal way.

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abctax55
Level 15

She 'donated' to a surrogate. 

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TaxGuyBill
Level 15

@abctax55 wrote:

An oldie, but a goodie:

http://www.taxalmanac.org/index.php/Discussion_Taxability_of__Donating__an_Egg_Cell_(Ovum).html


 

That interesting; I wouldn't have though about the possibility of it being a capital asset.

 

As a side note, whenever I read anything from the deceased TaxAlmanac, it just reminds me of how Intuit doesn't give 💩 about tax professionals.

 

 

PATAX
Level 15

I don't have any clients with chicken farms. A little bit rare in these parts.

itonewbie
Level 15

Love TaxAlmanac!

Figured that's how the IRS would look at it, all based on whether these "donations" constitute §162 ToB from the perspectives of regularity, continuity, and profit motive (Commissioner v. Groetzinger, 480 U.S. 23 (1987)).

It's not surprising once you look at the legalese on these plasma centers' websites as well, which their attorneys must have pored over, they coin money they offer in exchange for "donations" as "rewards" that are "earned" with each donation.  Just to be consistent with that position, they even issue 1099-NEC's.

On these centers' websites, based on what I could tell from a cursory look, there is no reference to them "buying" plasma (in any sense at all) and there doesn't seem to be any correlation between the amount of "rewards" and the amount of plasma that could be "donated" due to various factors.  One would also surmise that there is a time element in these "rewards" because the process could apparently be quite time consuming.

The amounts reported on these 1099-NEC's would, no doubt, give the IRS an early indication of whether there is a pattern of regularity and continuity.

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Still an AllStar
itonewbie
Level 15

Similarly for egg donations, there doesn't seem to be any correlation between the quantity and quality of the eggs being "donated" and the compensation that is paid.  Here are excerpts from two centers about their compensation or rewards for donors [emphasis added] -

Egg donor compensation

Along with the appreciation and gratitude from your recipients, our egg donors are given a financial compensation for fulfilling their donor responsibilities. The egg donation pay ranges from $7,500 and up. First time donors begin at $7,500 with increased compensation for subsequent cycles. The egg donation compensation rewards you for your time, effort, and dedication.

When are Egg Donors Compensated?

Egg donor payments are broken into two disbursements. The first payment made to an egg donor is $750 and is paid upon the start of injectable medications. The balance of an egg donor’s compensation is paid after the completion of the egg retrieval procedure regardless of the number of eggs retrieved.

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Still an AllStar
dkh
Level 15

This was an informative post.   Thanks to all of you.    I love learning new things. 

abctax55
Level 15

I made some good contacts, even friends, over on TA.  There were some brilliant tax minds posting over there, in it's heyday.  I still do not understand why it was closed down by Intuit.

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itonewbie
Level 15

Compared to TaxAlmanac, everything here (I mean everything, down to the point system) looks like kiddie park.

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Still an AllStar
Ohhhhh
Level 2

Yes, the most recent thread at Tax Almanac was dated 2008.

 

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BobKamman
Level 15

I don't come here to chitchat about old times or review secondary sources.  When there is a Tax Court decision on point, I suggest you follow it.  

https://wilsontaxlaw.com/newsresources/interesting-tax-opinions/nichelle-g-perez-petitioner-v-commis... 

Especially when it's written by the magnificent Judge Holmes.  

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BobKamman
Level 15

The Tax Court's DAWSON website is dysfunctional, but if you want a mile-long link to a more readable copy, here it is: 

Well, apparently that didn't work.  Go to ustaxcourt.gov and search opinions for nichelle perez

Ohhhhh
Level 2

"Donation" was to a CLINIC. They pay.

"Egg Donor" is the terminology.

abctax55
Level 15

@Ohhhhh 

Yeah.... I think we all understood that (except one 😉

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qbteachmt
Level 15

"How is this a donation if she got paid to do it?"

""Donation" was to a CLINIC. They pay.

"Egg Donor" is the terminology."

The point being, in the US you cannot buy/sell organs. That's why kidneys also are donated and not sold to the highest bidder.

You can be paid for costs, inconvenience, etc. Not for the egg or organ.

At least, that's the plan.

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