Settlement Award Tax

[blasfemaz]

What is the name of your state (only U.S. law)? TEXAS

My brother, sister, and I, received checks from a settlement award. Our lawyer said we did not have to pay taxes on it.

The situation is as follows.
I never wanted my part, and I told my lawyer to just give my part to my brother, but he forgot and ended up sending a check under my name. I just went ahead and gave it to my brother, and he deposited the check to his bank account.

My question is, how is this going to work out? Will he have to pay taxes on what I gave him?

 

[LdiJ]

What is the name of your state (only U.S. law)? TEXAS

My brother, sister, and I, received checks from a settlement award. Our lawyer said we did not have to pay taxes on it.

The situation is as follows.
I never wanted my part, and I told my lawyer to just give my part to my brother, but he forgot and ended up sending a check under my name. I just went ahead and gave it to my brother, and he deposited the check to his bank account.

My question is, how is this going to work out? Will he have to pay taxes on what I gave him?

This is the sort of things that its critical that people ask questions about BEFORE they do things, rather than afterwards.

What was the settlement actually for, and how much was your share?

 

[blasfemaz]

Our mother passed away in a car accident, and the automaker was at fault.

Each of us received a check for 105k.

Thanks for your help.

 

[tranquility]

It's your money and you made a gift of the amount to your brother. Be sure to file a gift tax return. I'd ask the attorney what the settlement was for exactly so you can bring the letter he gives you to a tax professional as it sounds very possible the settlement is income.