Every year around Christmas, John receives cards from various car repair facilit

Question

Every year around Christmas, John receives cards from various car repair facilities (including dealerships) expressing thanks for the business referrals and enclosing cash. John has no arrangement, contractual or otherwise, that requires any compensation for the referrals he makes. Concerned about the legality of such "gifts," John consulted an attorney about the matter a few years ago. Without passing judgment on the status of the payors, the attorney found that John's acceptance of the payments does not violate state or local law. John sincerely believes that the payments he receives have no effect on the referrals he makes. During December 2014, John received cards containing $7,200. One additional card containing

Explanation / Answer

In this case there is no legal implications but John has to include $ 7200 in his gross income.

It should be treated as income from other sources.

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