This one has the potential to be a real gamechanger for college students, homeless alcoholics, and non-smoking 21 – 30 year old intelligent Jewish women everywhere:
To Nichelle Perez, the $20,000 she received for donating her eggs for fertility treatments was a tax-exempt payment for pain and suffering.
Not so, said the U.S. Internal Revenue Service, which considers it income.
The California woman and the government are arguing over whether egg donation is an act of commerce that should be taxed. A U.S. Tax Court judge will determine the outcome in what is seen as a precedent-setting case that could provide certainty for people who donate eggs, sperm and blood plasma.
Perez did not report the "income," nor does she consider it such. The IRS disagrees, and thinks she owes $4,998 in taxes plus interest.
“This is in no way considered self-employment since I did not sell a product or service," she said in a court filing. "I feel like I am being penalized for doing something good for another person.”
FYI kiddo, doing something good for another person generally does not involve receiving a payment of $20,000.
The interesting part of this case — strange justifications aside — is the idea that the sale of her eggs could actually be treated as long-term capital gains since she had the eggs for, like, ever and profited off their sale.
How exactly does one book that?