Play Meter

Issue: 1980 April 01 - Vol 6 Num 6

Tax Clinic
Salary of relatives deductible
QUESTION: What are the tax effects
of placing children on the payroll?
ANSWER: Payments to children and
relatives in general are deductible as
compensation only for services actu-
ally rendered , either in connection
with a trade or business , or in the
production
and
generation
of
income
These transactions involve related
parties. and are generally not
considered to be made at arm 's
length . The Internal Revenue Service
and the courts will closely scrutinize
these payments to ensure that they
are made in connection with actual
services rendered , and that the
remuneration is rasonable in relation
to the services . Due to the nature of
these transactions , documentary evi -
dence o f the amounts paid should be
carefully maintained to satisfy the
strict scrutiny that these relationships
are subjected to .
In determining whether these
payments are for services actually
rendered, the courts examine the
circumstances to decide whether a
bona fid e emp loym ent relationship
existed. or whether the payments are
being made strictly for family pur-
poses . The Internal Revenue Service
also scrutinizes the situation where
payment for services rendered to a
child are deposited in Joint Bank
Accounts between the parent and
child to determine if the payments
actually benefitted the child / employ-
ee . The amount of the compensation
paid to the child also must be
reasonable in relation to the work
performed since unreasonable com -
pensation will be disallowed as a
deduction to the employer .
Reasonable wages paid by a
parent to an unemancipated minor
child , under 21 years of age. made
for personal services rendered as a
bona fide employee. are deductible
by the parent. as an expense . The
income of that child is included in his
or her own gross income, and not in
the gross income of the parent.
Payments made to the child for
services normally expected to be
rendered by them as household
members . such as cleaning. mowing
the lawn. etc . . are personal ex -
non -deductible
by
the
penses.
parent.
In the event you are a sole
proprietorship. employment of your
child will benefit both of you since
wages paid to your child who is
under 21 years of age are not subject
to social security tax or federal
unemployment tax. As a result of
the higher costs of social security
taxes.
this exemption
provides
substantial savings to both you and
your child .
The Internal Revenue Code
clearly allows and encourages the
employment of children. providing a
bona fide employment relationship
exists, and wages paid are reason -
able in light of the services actually
performed.
Bob Salmons and Russ MacDonald. Atari technical advisors. travelled
throughout the United States and Europe during January and February
conducting service seminars. Topics covered included basic electronics .
troubleshooting techniques. microprocessor technology. "how to read
schematics." test equipment. power supplies. and Basic IC.
Classified
FOR SALE: 10 Ramtek Boom Balls. Complete,
working and in excellent condition . Pick-up in So.
California. MALIBU GRAND PRIX - Brucie or Jim,
Tel.: 213/703-0022.
SOLID BRASS FRONT MillS GOLDEN NUGGET
slot machines, from Golden Nugget Casino in las
Vegas; Mills Black Cherry machines, all in good
condition; for pictures and prices, send $2 to:
UNIVERSAL COIN INC., Suite 109, P.O. Box 181XXJ, las
Vegas, NV 89109.
REWARD! I have$100,000to spend on Slot Machines;
1015 Wurlitzer Jukeboxes; parts; or any antique coin
machines. 414/008-4540.
MYLAR FILM for pinball playfields. 24"x44" sheet
covers entire playfield. Step by step instructions
included. $10 each plus $1.50 postage and handling.
SAN DIEGO ARCADE SERVICE, 6123 El Cajon Blvd.,
San Diego, CA 92115.
FOR THE BEST IN USED FLIPPERS, VIDEO GAMES,
and arcade equipment:! the cheapest prices see our
regular ad in the class1fieu section of PLAY METER
MAGAZINE. NEW ORLEANS NOVELTY COMPANY,
1055 Dryades Street, New Orleans, LA Tel.:
504/529-7321 .
FOR SALE: Gremlin Playballs and Trapshoots. Good
condition. $350. COIN SERVICES, INC., 12$4 South
Weller, Seattle, WA. Tel.: 200/323-7588.
WANTED: One set of P.C. Boards for fun game
'Tankers". Send information to: CIA. ISTMENA DE
DIVERSIONES S.A., APDD. 6-200 Estafeta El Dorado,
Panama, R. de PANAMA.
24-HOUR PINBAll AND VIDEO GAME BOARD
repairs. Bring in or mail in any board and get it back in
24 hrs. most cases. PYRAMID VENDING REPAIRS.
4823 Ave. N, Brooklyn, NY 11234. Tel.: 212/252-5869.
PARTS: I.C.C. SPITFIRE & SKY TACK; MARVENA
Mine ~weeper . We have a complete inventory
including logic boards. Bill GROSSMAN & ASSO-
CIATES, BOX 5421 , Incline Village, NV 89450. Tel.:
702/831 -2!100.
SKEE BAllS FOR SALE: 6 MECH. with ticket
dispensers. Good condition; make offer. LAWSON
MUSIC CO ., P.O. Box 591 , Winter Haven, Fl 338111.
Tel.: 813/007-1171.
WANTED: Backglass for Gottlieb Cover Girl and
Crosstown games. DON MURRAY, 2015 N. Kolman
Ave ., Chicago, ll60039. Tel.: 312/235-3360.
OLD/ANTIQUE SLOT MACHINES WANTED. legal
buyer. Will travel. Cash. JACKPOT AMUSEMENTS.
Tel.: 312/849-4041 .
NEED Backglass for Bally "Deluxe" Super Jumbo.
FAIRWAY AMUSEMENT, 1102 Moss St., Columbus,
MS 39701 . Tel.: 601 /328-3391.
COLLECTION OF ANTIQUE SLOT MACHINES, Juke-
boxes, arcade, dice, vending. Would like to hear from
people with machine parts or literature to sell. Cash,
will travel. Tel. : 414/008-4540.
WANTED: Nintendo game Wild Gun !Pistol!. Call
804/855-1955 with price and condition. ASK for JOE
VITA.
FOR SALE: Pinball - Strike Spares 695, lost World
825, Mata Hari 750, 6 Million 875, Sinbad 750. Video:
Space War 950, Destroyer 595, Football1095. Call RAY
CENCI, 212/851 -8844.
FREE
Your classified ad will be listed here absolutely free of charge . Simply fill
out your ad on a 3X5 card and mail it to Play Meter Update, P .O. Box
24170 , New Orleans , La . 70184 .
Please print your ad clearly and limit it to 30 words or less . Additional
words may be purchased at the rate of .25 per word. Please enclose check
or mo ney order with over-run ads . Over-run ads received without
payment of extra wordage will be edited to size , if possible , or discarded
completely.
Classified display rates are available at the flat rate of $10 .00 per column
inch . This FREE CLASSIFIED offer is strictly for paid subscribers only .
LIMIT - one ad per subscriber please .
PlAY METER
2nd Class
U.S. Postage Paid
New Orleans, La .
70113
P.O. Box 24170
New Orleans, La. 70184
TRADE OUR ARCADE PIECES FOR YOURS. Equal
value. Good condition. For copy of our list write N.
lee arnold, lemans speedway, noo E. Kellogg,
Wichita, KS 67207. Tel.: 316/685-1446.
WANTED: USED POKER GAMES - Sircoma or A1
Video. Reply to: Maplewood Sales Co., 171 Maple-
wood St., Malden, MA 02148. Call collect:
617/321 -1742.
FREE CATALOG and samples showing vending
machine labels, truck signs and badges. SETON
NAME PLATE CORP. 2050 Boulevard, New Haven, CT
~505. Tel.: 203m2-2520.
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