Another Christmas gift question....what to do about cashing checks....

[JEM]

My mom is mailing a check for us and the kids vs. mailing gifts long distance.

In the past, I would just deposit it in our account, and take the money back out and we'd all spend it on what we wanted to.

This whole "what is considered income" thing still confuses me. I don't want a Christmas gift counted as income. Will it be?

How should I handle this?

[Clouddancer]

My mom is mailing a check for us and the kids vs. mailing gifts long distance.

In the past, I would just deposit it in our account, and take the money back out and we'd all spend it on what we wanted to.

This whole "what is considered income" thing still confuses me. I don't want a Christmas gift counted as income. Will it be?

How should I handle this?

Gifts aren't income.

[justbroke]

Technically, gifts are income, but small gifts are not an issue and are usually ignored. If you receive a gift consisting of thousands of dollars, that will cause income issues.

This is generally an issue for your specific District and Trustee. Many will assume that only taxable income is part of the current monthly income (CMI) in a Bankruptcy. That is just not true. Bankruptcy includes income from all sources, regardless of tax liability.

Small gifts are insignificant and when divided out for the CMI, could really be nothing. That's why small gifts don't matter. For example, you personally receive (not your children, you) a gift of $100 from your parents. When this gets added to your CMI (last six months) then divided by 6, that's only $16. Not much to really excite the Trustee. However, a gift of say $1,000... gets interesting.

Repeating... this can vary by District, Trustee, and on a case by case basis. I wouldn't worry about small gifts. If you deposit a large check into your bank account, the Trustee may ask what that was.

[JEM]

Technically, gifts are income, but small gifts are not an issue and are usually ignored. If you receive a gift consisting of thousands of dollars, that will cause income issues.

This is generally an issue for your specific District and Trustee. Many will assume that only taxable income is part of the current monthly income (CMI) in a Bankruptcy. That is just not true. Bankruptcy includes income from all sources, regardless of tax liability.

Small gifts are insignificant and when divided out for the CMI, could really be nothing. That's why small gifts don't matter. For example, you personally receive (not your children, you) a gift of $100 from your parents. When this gets added to your CMI (last six months) then divided by 6, that's only $16. Not much to really excite the Trustee. However, a gift of say $1,000... gets interesting.

Repeating... this can vary by District, Trustee, and on a case by case basis. I wouldn't worry about small gifts. If you deposit a large check into your bank account, the Trustee may ask what that was.

We will each probably get $100. So that's a large-ish check. 4 of us living here, and my mom will send my older son's here for him to come pick up. So $500 in one check, but for 5 people.

The part about "not the kids", aren't their "assets" mine, because they are minors? Therefore if my mom gives them $100 at Christmas, doesn't that become "ours" in essence?

[justbroke]

We will each probably get $100. So that's a large-ish check. 4 of us living here, and my mom will send my older son's here for him to come pick up. So $500 in one check, but for 5 people.

That's not "large" because it's spread across the children.

The part about "not the kids", aren't their "assets" mine, because they are minors? Therefore if my mom gives them $100 at Christmas, doesn't that become "ours" in essence?

No, their assets are not your assets. If your mom gives them a Gameboy, it's the child's Gameboy, not yours. You are just a custodian.

I don't think I'd worry about it. It's completely normal to receive and handle gifts for your minor children.

[JEM]

Ok whew.

Here I was worrying about receiving any gifts or money for Christmas.

[JoeBankrupt33]

If it's a check for $500, I would just cash it. When my BK was audited, they asked me to account for any deposit $500 and over in the last 6 months. I did have some large gifts, totaling about $2500 that I did not list as income. I wasn't trying to hide it, I just didn't know it was income. It didn't cause me any problems, though, because I had a little room to spare between my income and the median.

[Clouddancer]

Technically, gifts are income, but small gifts are not an issue and are usually ignored. If you receive a gift consisting of thousands of dollars, that will cause income issues.

This is generally an issue for your specific District and Trustee. Many will assume that only taxable income is part of the current monthly income (CMI) in a Bankruptcy. That is just not true. Bankruptcy includes income from all sources, regardless of tax liability.

Small gifts are insignificant and when divided out for the CMI, could really be nothing. That's why small gifts don't matter. For example, you personally receive (not your children, you) a gift of $100 from your parents. When this gets added to your CMI (last six months) then divided by 6, that's only $16. Not much to really excite the Trustee. However, a gift of say $1,000... gets interesting.

Repeating... this can vary by district, Trustee, and on a case by case basis. I wouldn't worry about small gifts. If you deposit a large check into your bank account, the Trustee may ask what that was.

I talked to several attorneys who are also trustee's and they all said that gifts are not income. I guess it must be a district thing. We need a section for district idiosyncrasies.

[justbroke]

I talked to several attorneys who are also trustee's and they all said that gifts are not income. I guess it must be a district thing. We need a section for district idiosyncrasies.

I really wish we could, Even within a District, the behavior of the individual Trustees and UST is not always consistent. In Florida, gifts received as support are considered income.

What's your State?

[Flamingo]

When it comes to finances during a Chapter 7 or Chapter 13, the best thing to do when in doubt and to prevent any future issues is to call your atrorney and ask about any gift or anything financial related because what one person may have to do in one state, the other person in another state does not have to do. I don't believe your Christmas check is an issue but you do need to know that a single check made out to you is a source of funds for you no matter what the purpose because even though a portion of it is supposed to be allotted for your minor children, you have access to those funds as the custodian.

[JEM]

When it comes to finances during a Chapter 7 or Chapter 13, the best thing to do when in doubt and to prevent any future issues is to call your atrorney and ask about any gift or anything financial related because what one person may have to do in one state, the other person in another state does not have to do. I don't believe your Christmas check is an issue but you do need to know that a single check made out to you is a source of funds for you no matter what the purpose because even though a portion of it is supposed to be allotted for your minor children, you have access to those funds as the custodian.

I'm confused again. I thought since part of it was for the kids, their portion WOULDN'T count as "ours" (me and my husband).

Should I just go to my mom's bank and cash it there with my ID?

I hate that I feel dishonest somehow about getting a Christmas gift.

In the grand scheme of things $500 isn't HUGE, but let's say they did add that to our income in the 6 months look back. That's another $83 month that would probably be considered DMI. Correct?

This is all so frustrating.

We haven't retained an attorney yet, so I have no idea what's "normal" in our district when it comes to this.

[justbroke]

I'm confused again. I thought since part of it was for the kids, their portion WOULDN'T count as "ours" (me and my husband).

It wouldn't but you may have to explain it. If you deposit into your account, and the BK Trustee is reviewing your statements, they may ask what that is.

Should I just go to my mom's bank and cash it there with my ID?

Yes, you can do that.

[JEM]

It wouldn't but you may have to explain it. If you deposit into your account, and the BK Trustee is reviewing your statements, they may ask what that is.

Yes, you can do that.

Is it *ok* to do that? Go to my mom's bank and cash it, that is.

She banks at Wells Fargo--anyone know if they charge to cash checks for non Wells customers?

[justbroke]

Is it *ok* to do that? Go to my mom's bank and cash it, that is.

Yes, why not?

She banks at Wells Fargo--anyone know if they charge to cash checks for non Wells customers?

If they're anything like BB&T, they'll charge you $5 for being a "non-customer".

[jadams]

Perhaps she could load a prepaid gift card with the $500 and just mail that to you?

Or USPS Money Orders are easy to get and can be cashed at any Post Office, no need to get your bank involved.

With 5 people, I doubt the trustee will have any problem with the $500, but take your attorney's advice if he/she has any.

If you go with a check, have your mother write "Happy Christmas Mary, Billy, Bob, etc." on the memo line -- and keep a photocopy of the check prior to deposit so you can present it if for whatever reason the $500 deposit is questioned.