Discussion:Wage bonus repaid in following yr

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(The Service take)
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(You mean this [h)
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{{ForumReplyPost|UserID=Taxwizard|Date=19 March 2008|Text=The Service takes the position that when the ensuing liability to restore an amount arose due to a subsequent event, the taxpayer had an “actual unrestricted right” in the prior year. See Revenue Ruling 68-53.}} {{ForumReplyPost|UserID=Taxwizard|Date=19 March 2008|Text=The Service takes the position that when the ensuing liability to restore an amount arose due to a subsequent event, the taxpayer had an “actual unrestricted right” in the prior year. See Revenue Ruling 68-53.}}
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 +{{ForumReplyPost|UserID=PostingFromWork|Date=19 March 2008|Text=You mean this [http://www.taxlinks.com/rulings/1968/revrul68-53.htm Rev Rule 68-53]? The one about the coin op gaming machines?
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 +All sign on bonsus I have seen are under a very real repayment restriction. It probally shouldn't have been reported as income in the first place. I've seen a couple that framed as loans, and were forgiven on the aniversery date and included in income in that year.}}

Revision as of 00:26, 19 March 2008

Discussion Forum Index --> Basic Tax Questions --> Wage bonus repaid in following yr
Discussion Forum Index --> Tax Questions --> Wage bonus repaid in following yr

Treypeterson (talk|edits) said:

18 March 2008
If an employee receives a signing bonus, $10K, net $7K, in 2007 and must repay the bonus because he quit in 2008, how does the employer report the repayment to the employee?

PostingFromWork (talk|edits) said:

18 March 2008
The employer would either report it as a a recovery of a tax benefit item, or as other income, on the appropriate schedule or form.


The employee would report it as either a 2% misc deduction or as a §1341 credit.

RoyDaleOne (talk|edits) said:

18 March 2008
Actually, because the amount is greater than $3,000 the options are different.

Taxwizard (talk|edits) said:

18 March 2008
Not sure that the claim of right doctrine applies here since the employee had an actual unrestricted right to income in a prior year (instead of an apparent unrestricted right).

PostingFromWork (talk|edits) said:

18 March 2008
There was no actual unrestricted right to the income since it was subject to conditions subsequent to payment.

If there was an unrestricted right to the money, he wouldn't have to repay it.

Roy: How would the options be different? You only get the two options since the repayment was greater then $3000, otherwise you'd be stuck with the misc deduction.

Taxwizard (talk|edits) said:

19 March 2008
The Service takes the position that when the ensuing liability to restore an amount arose due to a subsequent event, the taxpayer had an “actual unrestricted right” in the prior year. See Revenue Ruling 68-53.

PostingFromWork (talk|edits) said:

19 March 2008
You mean this Rev Rule 68-53? The one about the coin op gaming machines?

All sign on bonsus I have seen are under a very real repayment restriction. It probally shouldn't have been reported as income in the first place. I've seen a couple that framed as loans, and were forgiven on the aniversery date and included in income in that year.

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