Originally Posted by TaxGuru
By the way, I am curious as to whether or not the homebuilder told you prior to issuing you these gift cards, that these gifts may be taxable or not and reported on a 1099-Misc to the IRS. The only good point here is that I suspect that the amount of value of the gift cards reported on 1099-Misc may not be subject to the S/E tax. I would consult with your CPA to confirm this point.
I was not informed that the gift cards may be taxable prior to receiving the 1099-MISC. It was explained to me that they could either purchase the appliances for the house for us, or give us money to purchase them ourselves. We chose to purchase them ourselves to have some say in the selection criteria.
Thanks for the reply TaxGuru.