IBA Compliance Connection

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We are considering providing new mortgage borrowers a $90.00 gift card for membership to a local organization. Would there be any tax or regulatory implications for a gift like this?

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We are not aware of any disclosure or other requirements that would apply to such a gift, provided that it is given to all new mortgage borrowers uniformly.

Notably, the IRS rules require you to report gifts that are valued over $600 on its 1099-MISC form, but the $90 gift cards would not trigger this requirement.

For resources related to our guidance, please see:

  • IRS Webpage, Form 1099-MISC (“File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year: . . . At least $600 in rents, services . . . prizes and awards . . . .”)