Solved: I received a lawsuit settlement. If I gift my minor child $14,000 this year, do I still have to pay taxes on that as income?
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I received a lawsuit settlement. If I gift my minor child $14,000 this year, do I still have to pay taxes on that as income?

 
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Level 14

I received a lawsuit settlement. If I gift my minor child $14,000 this year, do I still have to pay taxes on that as income?

Here are the IRS guidelines on which types of settlements are taxable:  https://www.irs.gov/pub/irs-pdf/p4345.pdf

Gifting part or all of a settlement does not affect its taxability.

The IRS gift exclusion amount for 2018 is $15,000.  Gifts of $15,000 or less do not require filing of a gift tax return.

Gifts are not deductible by the donor, nor are they taxable to the recipient.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

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Level 15

I received a lawsuit settlement. If I gift my minor child $14,000 this year, do I still have to pay taxes on that as income?

See the answers to your other question asking the same thing.

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4510451-how-can-i-avoid-massive-taxes-from-a-lawsuit-settlement-de...>
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
New Member

I received a lawsuit settlement. If I gift my minor child $14,000 this year, do I still have to pay taxes on that as income?

The other question is more broad. But thank you SO much for all your help!
Level 14

I received a lawsuit settlement. If I gift my minor child $14,000 this year, do I still have to pay taxes on that as income?

Here are the IRS guidelines on which types of settlements are taxable:  https://www.irs.gov/pub/irs-pdf/p4345.pdf

Gifting part or all of a settlement does not affect its taxability.

The IRS gift exclusion amount for 2018 is $15,000.  Gifts of $15,000 or less do not require filing of a gift tax return.

Gifts are not deductible by the donor, nor are they taxable to the recipient.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

View solution in original post

Anonymous
Not applicable

I received a lawsuit settlement. If I gift my minor child $14,000 this year, do I still have to pay taxes on that as income?

if it is taxable, any amount gifted would still be taxable to you. 

Level 15

I received a lawsuit settlement. If I gift my minor child $14,000 this year, do I still have to pay taxes on that as income?

Settlements are not always taxable, it depends on what it was for.  But if it is taxable, anything you do with the money after you receive it is treated as a separate event, and gifts are never tax deductible.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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