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Gestational Surrogacy

Level 11
Level 11

Hi All. I was curious as to whether anyone has dealt with Gestational Surrogacy in the past before? Can anyone point me in the right direction or have any insight they might share. 

I get conflicting info as to taxability. I think it is but.....

Thanks!!

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6 Replies 6
Level 13

Can you clarify what exactly you are looking for?

Are you asking how the payments a person receives for carrying someone's baby should be treated for tax purposes?  Or are you looking at some other aspect of it?

Level 11
Level 11

Thanks @TaxGuyBill 

I guess I was just asking for others thoughts on taxability. I read that some tried "gift" approach and the courts siding with IRS or others trying "pain and suffering" using and IRC code which didnt fly either. 

I have not contacted potential client as of yet....just trying to gather my thoughts on the subject.

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Level 13

It has been a while since I looked into it, but money paid to the surrogate is almost definitely taxable. 

Whether or not it is a "business" on Schedule C and subject to SE tax or not is the bigger question.  I suspect that if it is just a one-time thing, it would usually be "other income" (not subject to SE tax). 

Level 11
Level 11

Thank you my friend. Thats what my reading has brought me to as well. I also believe in taxability. 

I did also see the SE debate as well. I side with you as well in that as long as its a one off, we tax fed/state rates and call it a day. 

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Level 15

This was talked about a few times in the old forum.  But this is the new forum and that old stuff is either gone or just can’t be found through the search function.

This week's special - free roadrunner dinner with every return (legal disclaimer - you catch it and we'll cook it)
Level 11
Level 11

Even the new forum is hard to get around. They've made this place harder with more bugs than the original. I feel for the current moderators........sinking ship and all. 

Thankfully we can address most problems here rather than relying on CSR. 

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