Is this author given a gift or is it a sale?

March 12th, 2015 → 1:41 am @ // No Comments

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I offer thousands of dollars worth of free books and sometimes a person gives me a donation as a way to thank me. Is this income or a gift?

-Elizabeth

Elizabeth,

If you gave books to individuals and the individuals thank you with cash in return, then that’s earned income to you (not a gift nor a donation). Just because they paid you far less than the market value does not matter. It’s still income you earned by selling an item.

Gifts are receipt of cash with no sale or trade attached to the transaction.

I assume your writing business is not a 501c3 charity, so you do not accept “donations.”

Carol Topp, CPA


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