Q Our condo gives out gifts (in monetary form) to the employees of the building. The gifts go through the president of the board first. The president has created a separate bank account for employee gifts. Is this breaking any laws? Should the president be withholding taxes from these gifts, which are pretty substantial?

—Interest-Bearing Gifts

A “The monetary ‘gifts’ are, from a tax point of view, employee compensation. All laws governing regular employee compensation apply, and income tax and FICA should be withheld,” says attorney Michael Manzi of the Manhattan-based law firm, Balber Pickard Maldonado & Van Der Tuin, PC. “There is no reason why the gifts should go through the board president as you describe. Indeed, it is bad practice for building funds to go through a personal bank account. Such a practice invites financial improprieties. Moreover, even if the funds are handled in a perfectly appropriate way, such a practice has a great potential for encouraging accusations of improprieties where none exist, putting the entire board in a bad light. In sum, bonuses to employees should be paid through the building’s regular payroll system, using regular building accounts.”