In a world where there are increasing options available as alternatives for women who struggle to get pregnant, there is also a lot of unchartered territory. New Ruling: IRS Can Tax Payments To Egg Donors As Income is a well written (and easy to understand) article outlining the controversial topic of donor compensation. Should compensation in egg donation be taxable income? The court says yes in the case of Nichelle Perez, a California Resident. The ruling was a difficult one on many fronts, but “as a result, the amounts paid to Perez, and presumably to all future egg donors, represented taxable income.”
Think of the tax implications if people could actually sell their body parts and other people could own them – your body parts would have a market value that would be considered part of your net worth. What if you were made to sell your body parts to pay off a debt or something. Truth is our body parts can’t ever belong to another person even if they have possession of them and have permission to do certain things with them, they cannot own us in whole or in part. Unlike property sales you can always have full authority over your body its tissue etc. So truth is they are not selling their eggs to anyone they are harvesting their eggs in order to make good on a series of promises they made in a contract. The money they get is actually compensation payment income for doing something the contract requires which is complying with all the rules during harvesting of their eggs. It is not reimbursement because it’s not actually dollar for dollar pay back for money they spent in travel or train tickets. It’s a fee paid to them for following the rules making the appointments etc. If they fail to follow the rules they might have to return the money. They could I suppose submit their parking stubs or bus transfers and actually be reimbursed on top of the compensation. But it is income. Even if you are awarded damages because someone hurt you in a car accident it is income to you for having done something which is suffer. It’s not like its tax free and undisclosed.
None of this is a true donation because the are not providing anything to a charitable organization. The doctors have no business selling sperm or eggs really because the party they came from can pull the plug and say give all the gametes back and that they forbid the implantation of any embryos unless they get to be named parent and they’d be fully within their rights and not have to give a dime of the money they were paid back. They were not paid for the gametes or embryos or parental rights or custody or any of that. They were compensated for their time during harvesting – that’s all. Everything else is just a promise that they don’t have to keep.