The Game is Giving Away $1 Million to Regular Joe, but is that a Good Tax Gift? – Los Angeles Income Tax Planning and Income Tax Litigation Attorney Bruce Givner

by Bruce Givner on November 15, 2013

Hip-hop artists “The Game” and Drake are giving away $1 million, not to any charity, but to everyday regular Joes and Janes. “The Game,” whose legal name is Jayceon Taylor, announced the gifts will be donated through the newly created Robin Hood Project because “I feel like it.” So what are the tax ramifications of these gifts?

Under the Internal Revenue Code, an individual generally can take a Schedule A deduction for gifts made to a qualified charity. Internal Revenue Code Section 170. Therefore, if the two rappers give the $1 million directly to individuals, neither would be allowed to take a charitable deduction. However, if the money is given to the Robin Hood Project, the Project is set up as a qualified 501(c)(3) organization, and the contributions are not given specifically for any particular individual, the $1 million may be deductible on Schedule A with some threshold limits.

As for the recipients, gifts are taxable to the donor, not the recipient. Further, only the annual portion of the gift given to a recipient that exceeds the annual exclusion is taxable. In 2013, the annual exclusion is $14 thousand per person.

“The Game,” a Dr. Dre protégé, grew up on the streets of Compton where he was a Blood. In 2013, “The Game” gave $30 thousand to defray the funeral costs for two families. One family was killed in an unexpected fire, while the other died during a gang shooting. Drake, a Grammy winning rapper, was born in Toronto, and is most known for his recent club fight with Chris Brown, which injured San Antonio Spur Tony Parker.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

Leave a Comment

Previous post:

Next post: