You have received a gift or donation for your daughter's therapy approx 10000 from several of your friends Is this considered income Do you need to pay taxes on it?

Answer 1

With some exceptions, mainly as to relation and amount, (which it seems are not applicable here), gifts are income. As such, you must include them in your tax. You will receive a 1099-Misc for the amount (although a group of casual friends will likely overlook this requirement). The other part of the form is sent by the giver to the IRS (so, yes they know about it). If the giver is NOT a qualified charity, they may well have gift tax consequences to report.

Consider the recently publicized cases of the Oprah gift of cars to audience members (then she agreed to pay their tax on them, as they are taxable), or the receipt of "gift bags" by Hollywood types that they then must also pay tax on. (Consequently many of the celebrities donated the gift to a charity to make it a deduction....this last part is important to you, as the medical expenses you'll be paying with the donation are probably going to be a deduction on your return, offsetting the income caused).