Return of tax-deductible gift
Have a question regarding the return of a tax-deductible gift that a friend made to a school back in 2003. In 2003 the school accepted the gift and issued him a receipt so that he could deduct the gift from his taxes. Unfortunately in the intervening years he and the school have had an ongoing series of disagreements over policy, and after years of acrimonious back and forth the school has agreed to return his gift to him. So my question is: how should the return of a tax-deductible gift be treated on his income tax? It's too late to go back and file a 1040-X for the year he took the deduction. It seems to me this is taxable income to him if he deducted the gift, much like a refund of income taxes from a state or municipality. Should the school issue some sort of 1099 form to him? Or should the school not worry about his tax implications and just send the check?