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Billing for Services Long After Work Completed

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  • 05-18-2011, 09:04 AM
    amington
    Billing for Services Long After Work Completed
    My question involves a consumer law issue in the State of: PA

    My friend recently began a personal relationship with someone in the home repair/construction business. He is doing a significant repair and reconstruction of her kitchen.

    My concern is that if this relationship goes south in, say, 18 months, can he bill her for his work? Would she be legally responsible for the bill, in other words?

    Thank you for your responses.
  • 05-18-2011, 09:42 AM
    Mr. Knowitall
    Re: Billing for Services Long After Work Completed
    Nobody here can promise that the boyfriend won't try to get compensation if they break up. If your friend wants to get whatever deal or understanding they have reduced to writing, she may do so. You can suggest that, although at this point it doesn't appear to be your affair.
  • 05-18-2011, 12:34 PM
    SimplyTheBest
    Re: Billing for Services Long After Work Completed
    Quote:

    Quoting amington
    View Post
    My question involves a consumer law issue in the State of: PA

    My friend recently began a personal relationship with someone in the home repair/construction business. He is doing a significant repair and reconstruction of her kitchen.

    My concern is that if this relationship goes south in, say, 18 months, can he bill her for his work? Would she be legally responsible for the bill, in other words?

    Yes and yes and by accepting the work without payment, she is accepting a gift which may be taxable. She needs to get the value of the work in writing tendered as a gift or some such language (accountant/attorney assistance required) which would relieve her from any liability to pay and address her potential tax issues (if any).
  • 05-19-2011, 04:46 AM
    DaveJames
    Re: Billing for Services Long After Work Completed
    Also, have they pulled the proper permits that are usually required when doing significant renovation?

    The tax assessor may get involved and the city inspector.
  • 05-19-2011, 09:14 AM
    llworking
    Re: Billing for Services Long After Work Completed
    Quote:

    Quoting SimplyTheBest
    View Post
    Yes and yes and by accepting the work without payment, she is accepting a gift which may be taxable. She needs to get the value of the work in writing tendered as a gift or some such language (accountant/attorney assistance required) which would relieve her from any liability to pay and address her potential tax issues (if any).

    A gift is NEVER taxable to the recipient, and is rarely taxable to the giver. Any annual amount of gift to a single person, which is less than 13,000.00 is neither taxable nor reportable. Therefore no, she certainly doesn't have to address any tax issues no matter how much the gift might be worth.
  • 05-19-2011, 02:37 PM
    SimplyTheBest
    Re: Billing for Services Long After Work Completed
    Quote:

    Quoting llworking
    View Post
    A gift is NEVER taxable to the recipient, and is rarely taxable to the giver. Any annual amount of gift to a single person, which is less than 13,000.00 is neither taxable nor reportable. Therefore no, she certainly doesn't have to address any tax issues no matter how much the gift might be worth.

    Au contraire, NEVER is a long lasting word. If the governing, taxing body sees that the gift is not transferred by a "detached and disinterested generosity" of the donor, and the courts are literally all over the place on this definition :mad:, then the transfer may be judged taxable.

    Which is why I said "she is accepting a gift which may be taxable. She needs to get the value of the work in writing tendered as a gift or some such language (accountant/attorney assistance required) which would relieve her from any liability to pay and address her potential tax issues (if any)."

    In short, don't fool around with tax law,transferred assets can be gifted if the transfer is properly executed. If not...:mad:
  • 05-19-2011, 02:48 PM
    Mr. Knowitall
    Re: Billing for Services Long After Work Completed
    That's a bit like saying that "If the issue is litigated and a court determines that the transfer was not a gift, it's not a gift." If your point is that not everything that might be called a gift is actually a gift, fair enough; but that doesn't contradict how the law treats actual gifts.
  • 05-19-2011, 03:20 PM
    SimplyTheBest
    Re: Billing for Services Long After Work Completed
    Quote:

    Quoting Mr. Knowitall
    View Post
    That's a bit like saying that "If the issue is litigated and a court determines that the transfer was not a gift, it's not a gift."

    Correct.
    Quote:

    If your point is that not everything that might be called a gift is actually a gift, fair enough; but that doesn't contradict how the law treats actual gifts.
    Again correct and how the law may treat this asset transfer is the impending reality. Consequently, the property transfer needs to be addressed by a professional in this field otherwise, if the tax man comes, and the documentation is improper or weak, he may very well claim that the transfer is not gifted and therefore is taxable.

    Whereupon the OP is left with having to defend the giftability in tax court and Woa unto him who finds him or herself in that predicament.
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