June 4, 2019 10:08 PM
last updated June 04, 2019 10:08 PM
We were given a $10,000.00 CD and decided to pay off a loan with it and when we did our taxes they said it was considered income and taxed us $2500.00
As the answer below says you do not report gifts on your tax return and gifts are not taxable. From what you've said it is not taxable. There must be more details. Ask your tax preparer why it's taxable. Did your mil take it out of a IRA or some kind of retirement account? Did she sell something? Was this a regular Desktop CD/Download program like at a bank or Credit Union?
If you have a tax preparer, maybe you should get them to explain it to you better. The limited information youre giving here, doesn't sound like a taxable event.
that doesn't sound correct. again, what type of document did you received from the bank that held the CD that was cashed? (just to verify, you're referring to a CD - Certificate of Deposit?)