When they provide an additional amount to cover taxes, don't they tax that too?
The IRS gets its cut on the whole thing. The gross-up just shifts more of the tax burden onto the sponsor and makes the win feel less painful for the recipient.
When they provide an additional amount to cover taxes, don't they tax that too?
The IRS gets its cut on the whole thing. The gross-up just shifts more of the tax burden onto the sponsor and makes the win feel less painful for the recipient.